Transparency policy

a) Whistle-blowing and fraud
i. To review the adequacy of the Company’s arrangements for its employees and contractors to raise concerns, in confidence, about possible wrongdoing in financial reporting or other matters. The Audit Committee will ensure that these arrangements allow proportionate and independent investigation of such matters and appropriate follow-up action.
ii. To review the Company’s fraud detection processes and procedures.
iii. To lead investigations in relation to any suspected cases of fraud.
b) Internal audit
i. To supervise the Company’s internal audit department to ensure its effectiveness in executing the activities and duties specified by the Board. [CGR Article 14 (c) 1]
ii. To review and approve the appointment and removal of the head of the internal audit function or an external party carrying out the internal audit function, as may be appropriate, from time to time;
iii. To review the internal audit procedures and prepare a written report on the findings and recommendations of internal audit. [CGR Article 14 (c) 2]
iv. To review and assess the annual internal audit plan / programs and ensure adequate coverage of all key functions of MEAHCO.
v. To review the internal audit reports related to the MEAHCO and pursue the implementation of corrective measures included in them. [CGR Article 14 (c) 3]
vi. To monitor management’s responsiveness to the findings and recommendations of the internal audit function.
vii. To ensure the internal audit function has adequate resources and appropriate access to information to enable it to perform its function effectively and in accordance with relevant professional standards applicable to internal auditors.
viii. Meet the head of internal audit, or the external party carrying out the internal audit function, at least once a year, without management being present, to discuss their remit and any issues arising from the internal audits carried out. In addition, the head of internal audit, or the external party carrying out the internal audit function, shall be given the right of direct access to the Chairman of the Committee.
c) External audit
i. To recommend to the Board the appointment, dismissal and the remuneration of external auditors while giving due regard to the independence of such external auditors. [CGR Article 14 (c) 4]
ii. To supervise the activities of the external auditors and approve any activity beyond the scope of the audit work assigned to them. [CGR Article 14 (c) 5]
iii. To review and monitor the external auditor’s independence and objectivity and the effectiveness of the audit process, taking into consideration relevant professional and regulatory requirements.
iv. To review together with the external auditor the audit plan and make any comments or recommendations. [CGR Article 14 (c) 6]
v. To review the comments raised by external auditor on the MEAHCO consolidated financial statements and follow up the actions taken to address those comments [CGR Article 14 (c) 7]. This shall include, but not be limited, to the following:
i. any major issues which were identified during the audit;
ii. key accounting and audit judgments;
iii. level of errors identified during the audit; and
iv. the effectiveness of the audit process.
vi. To review any representation letters requested by the external auditor before being signed off by the management and the external auditor’s management letter and response to the auditor’s findings and recommendations.
d) Compliance Monitoring
i. Monitor and review the effectiveness of the Company’s compliance monitoring system relating to the Company’s compliance with its financial reporting obligations pursuant to the laws and regulations and regulatory requirements.
ii. Review the management’s investigations and actions on any acts of non-compliance.
iii. Obtain updates from the management as required and the Company’s legal counsel regarding compliance matters that may have a material impact on the financial statements compliance policies.
iv. Obtain assurances from the external auditors that all regulatory compliance matters relating to the business of the company have been considered in the preparation of the financial statements.
v. Review the budgets of the Company and provide comments and recommendations to the Board for approval of the annual budgets.
vi. Review and ensure that all related party transactions are in accordance with the applicable laws, regulations and guidelines of the CMA, the Code and the Company’s Conflict of Interest Schedule I: Information Disclosure and Transparency Policy

As approved pursuant to the Resolution passed by the Board of Directors of “Middle East Healthcare Company”, issued on 22.07.1436H (corresponding to 11.05.2015G), and adopted pursuant to the Resolution passed by the General Assembly of Middle East Healthcare Company pursuant to a meeting held on 28.07.1436H (corresponding to 17.05.2015G).



CONTENTS
Article (1): Overview
Article (2): Principles and Objectives of Disclosure
Article (3): Persons authorized to disclose Information on behalf of the Company
Article (4): Parties and Rules of Disclosure
Article (5): Compliance with Disclosure Requirements
Article (6): Disclosure of Financial Information
Article (7): Board of Directors’ Annual Report
Article (8): Reporting related to Securities
Article (9): Language of Announcements, Notifications and Reports
Article (10): Information available to Shareholders
Article (11): Confidential Information
Article (12): Insider Information



Article (1): Overview
1.1. This Information Disclosure and Transparency Policy of MEAHCO is prepared pursuant to the requirements of the CGR, prescribed in Articles number (4), (8) and (9) thereof, and in accordance with the Companies Law, the Listing Rules and the Bylaws.
1.2. This Policy regulates the process of disclosure of the Company’s information, its business and its various activities, in addition to the disclosure of important developments thereto from time to time.
1.3. The Board and the CEO of MEAHCO shall be responsible for ascertaining the Company’s compliance with the provisions of this policy.
Article (2): Objectives and Principles of Disclosure
2.1. The objective of disclosing certain information is to provide such information to the Shareholders to enable them to exercise their rights effectively. Such disclosed information shall be comprehensive and accurate and shall be presented and updated on a regular basis and shall be provided in a timely manner by using the most effective means of communication with the Shareholders on an equal basis.
2.2. The Company shall adopt the principle of accuracy and transparency when disclosing information, and it shall ensure that all such information is easily accessible at suitable times, taking into consideration the Company’s pursuit to achieve an appropriate balance between the information to be disclosed and such information which should be kept confidential in protection of its interests, while ensuring full compliance with all the laws and regulations applicable in this regard.
2.3. The Company shall disclose all influential and material information as imposed by the applicable laws and regulations in this regard, including such information which shall have a negative impact and which is considered to be material or essential to the Shareholders and the public.
2.4. The Company shall apply the principle of equality amongst all Shareholders and beneficiaries benefiting of the disclosed information without prejudice to any party.
Article (3): Persons authorized to disclose Information on behalf of the Company
3.1. The following employees are the persons authorised to disclose information on behalf of MEAHCO:
a) Board of Directors;
b) CEO;
c) Legal Counsel; and
d) Chief Financial Officer (“CFO”).
3.2. In order to ensure compliance with this disclosure policy, the persons authorized to disclose information on behalf of the Company may, on an urgent basis only, delegate other persons to disclose information on their behalf. In general, any person other than those duly authorized by the Company shall be prohibited from disclosing any information or from answering any questions pertaining to the activities of the Company without first obtaining the prior permission of the Board.
3.3. Disclosure of public reports which may have a significant impact on the Company’s business activities or on the value of its shares shall be coordinated with the CEO, the CFO or any other person determined by the CEO.
3.4. If a Company employee participates in any public event in an official capacity, then such employee shall ensure that any disclosure of information regarding the Company is made in strict compliance with the Company's disclosure policy and with the prior written consent of a person authorized to disclose Company information.
3.5. Persons authorized to disclose Company information shall be fully informed regarding the Company's business activities. The Company CEO shall be responsible for ensuring compliance by the authorized persons with this provision.
Article (4): Parties and Rules of Disclosure
4.1. The Board, or such other person responsible for the Company's disclosure policy, in coordination with the CEO, shall develop, review, and improve the Company’s disclosure policy on a regular basis.
4.2. The CEO shall be responsible for the organization, accuracy, and timeliness of disclosure of information required by the relevant governmental authorities, Shareholders, creditors and other related parties.
4.3. The Company Secretary shall, in coordination with the CEO, assume the following duties:
a) Determination of the times of disclosing information and to ensure that the interim and annual financial statements are disclosed, as well as any information regarding material events which affect the Company's business and financial operations;
b) Safekeeping the Company's documents which the Company should store and to control access thereto and to provide certified copies thereof.
4.4. The Company's disclosure policy shall be implemented in accordance with the regulatory requirements imposed by the laws and regulations applicable in this regard and in the best interests of the Company and its shareholders.
4.5. The Company’s CEO and other authorized persons shall always have complete information on all aspects of the Company's business activities for the following purposes:
a) Determining whether such information meets the disclosure requirements, whether it is material, and whether it may be disclosed at that particular time;
b) Ensuring the proper understanding of the current operations of the Company that may be of interest to the Shareholders; and
c) Preventing situations where the Company might inadvertently deny or change its position regarding any information that has already been disclosed by the Company.
Article (5): Compliance with Disclosure of Information
5.1. Any disclosure by the Company to the Shareholders, the public and the CMA must be clear, truthful and not misleading.
5.2. Disclosure of information or material developments as set out in Article 5.3 below to the public must be made at least 2 hours prior to the start of trading on the stock market.
5.3. Compliance with the disclosure of material developments:
5.3.1. The Company must notify the CMA and the public without delay of any material developments in its sphere of activity which are not public knowledge and which may have an effect on the assets and liabilities or financial position or on the general course of business of the Company and which may:
1. Lead to fluctuation in the price of the Company’s listed securities; or
2. Significantly affect the Company’s ability to meet its commitments in respect of debt instruments.
To determine whether a development falls within the scope of this paragraph (5.3.1), the Company must assess whether any investor would be likely to consider the information about such development in making his decision of whether or not to invest in the securities issued by the Company.
5.3.2. Material developments referred to in paragraph (5.3.1) of this Article which the Company must disclose include, but are not limited to, the following:
1. Any transaction to purchase or sell an asset at a price equal to or greater than 10% of the net assets of the Company. The Company’s disclosure must contain the following information (where applicable):
a) Transaction details, conditions, the parties involved and the method of funding.
b) Description of the business which is subject of the transaction.
c) Three (3) years financial information of the asset which is the subject of the transaction.
d) Reasons for entering into the transaction reasons and the expected effects of the same on the Company and its operations.
e) Statement on the use of proceeds.
2. Any debt outside the Company’s ordinary course of business, of a value equal to or greater than 10% of the Company’s net assets.
3. Any losses equal to or greater than 10% of the Company net assets.
4. Any significant change in the Company’s production environment or activity, including but not limited to, the availability of resources and the possibility of obtaining the same.
5. The appointment of a new CEO to the Company or any changes in the composition of the Board.
6. Any significant legal proceedings where the value involved is equal to or is greater than 1% of the net assets of the Company.
7. The increase or decrease in the net assets of the Company which is equal to or greater than 10%.
8. The increase or decrease in the gross profit of the Company which is equal to or greater than 10%.
9. The entering into, or the unexpected termination of, any contract with revenues equal to or greater than 1% of the gross revenues of the Company.
10. Any transaction between the Company and a related party or any arrangement through which the Company and a related party invest in any project or asset or provide financing thereto.
11. Any interruption in the principal activities of the Company.

 



Article (6): Disclosure of Financial Information
5.1. The Board must approve the interim and annual financial statements of the Company, and such statements must be signed by a Board member who is delegated by the Board, the CEO and the CFO prior to publishing and distributing them to the Shareholders and others.
5.2. The interim and annual financial statements and the Board’s Report must be submitted to the CMA as soon as they are approved by the Board.
5.3. The Company shall announce, via the electronic applications determined by the CMA, its interim and annual financial statements as soon as they are approved by the Board. Such statements cannot be announced to the Shareholders and the related parties before they are announced on the website of Tadawul.
5.4. The Company shall provide the CMA and shall announce to the Shareholders its interim financial statements, which are prepared and checked in accordance with the accounting standards issued by SOCPA, immediately after they are approved and within a maximum of 15 days after the end of the financial period covered by the said financial statements.
5.5. The Company shall provide the CMA and shall announce to the Shareholders its annual financial statements, which are prepared and checked in accordance with the accounting standards issued by the SOCPA, immediately after they are approved and within a maximum of 40 days after the end of the financial period covered by the annual audited financial statements. In addition, the Company must provide the CMA with and shall announce to its Shareholders its annual audited financial statements within a period of not less than 25 Gregorian days before the date of the annual General Assembly meeting.
5.6. The Company ensures the compliance of the auditor who audits the financial statements, and that of any of his partners, with the regulations of the Saudi Organisation of Certified Public Accountants (SOPCA) with regards to the ownership of any Company shares or securities. This is done to ensure the independence of the auditor, and that of any partner or an employee working with him.
Article (7): Board’s Annual Report
The Company shall attach with its annual financial statements a report by the Board that includes an overview of its operations during the last fiscal year and all the factors affecting its operations which an investor would require in relation to the Company’s securities in order to assess the Company’s assets, liabilities and financial position. The Board’s Report shall include:
1. A description of the principal activities of the Company. If two or more activities are described, a statement must be included for each activity showing the turnover of such activity and its contribution to the Company’s business results.
2. A description of the Company’s significant plans and decisions (including any restructuring, business expansion or suspension of the Company’s operations, the future prospects of the Company's business and any risks facing it).
3. A summary, in the form of a table or a chart, of the Company’s assets and liabilities and of the Company’s business results for the last five financial years or since incorporation, whichever is shorter.
4. A geographical analysis of the gross revenue of the Company.
5. An explanation for any material differences in the operating results of the previous year or any announced forecast made by the Company.
6. An explanation for any departure from the accounting standards issued by SOCPA.
7. The name of every subsidiary, its share capital, the Company’s ownership percentage in it, its main business, its principal country of operation and its country of incorporation.
8. The particulars of the issued shares and debt instruments of every subsidiary.
9. A description of the Company’s dividend policy.
10. A description of any interest in a class of voting shares held by persons (other than the Company’s directors, senior executives and their relatives) that have notified the Company of such interests pursuant to Article (45) of the Registration and Listing Rules and of any change to such interests during the last financial year.
11. A description of any interest, contractually based securities, and subscription rights of the Company’s directors, senior executives and their relatives in the shares or debt instruments of the Company, as well as any change to such interest or rights during the last financial year.
12. Information relating to any borrowings of the Company, whether repayable on demand or otherwise, and a statement of the aggregate indebtedness of the Company as well as any amounts paid by the Company as a repayment of loans during the year. Where the Company has no outstanding loans, then the Company shall provide confirmation to that effect.
13. A description of the classes and numbers of any convertible debt instruments, any contractually based securities, warrants or similar rights issued or granted by the Company during the financial year, together with a clarification of any compensation received by the Company in return.
14. A description of any conversion or subscription rights under any convertible debt instruments, contractually based securities, warrants or similar rights issued or granted by the Company.
15. A description of any redemption or purchase or cancellation by the Company of any redeemable debt instruments and the value of such outstanding securities, while distinguishing between those listed securities purchased by the Company.
16. The number of Board’s meetings held during the last financial year and the attendance record of each meeting, listing the names of all the attendees.
17. A description of any transaction between the Company and any related party.
18. Information relating to any businesses or contract to which the Company is a party and in which a director of the Company, the CEO, the CFO or any person related to any of them has an interest or has had an interest in the past. Where the Company is not a party to such arrangement, then it shall provide confirmation to such effect.
19. Names of joint stock companies where a member of the Company’s Board is also a member on their board of directors.
20. Constitution of the Board and the classification of its members as follows: Executive, Non-Executive, or Independent.
21. A brief description of the competences and duties of the Board's main committees, such as the Audit Committee, the Nomination and Remuneration Committee, and Executive Committee, indicating their names, names of their chairmen, names of their members, and the aggregate number of their respective meetings.
22. Details of compensation and remuneration paid to each of the following:
a) Board members.
b) The top five executives who have received the highest compensation and remuneration from the Company. The CEO and the CFO shall be included if they are not within the top five.
23. Any punishment or penalty or preventive restriction imposed on the Company by the CMA or any other supervisory or regulatory or judiciary body.
24. Clarification as to which provisions of the Corporate Governance Code have been implemented and those which have not, and the reasons for the same.
25. Results of the annual audit which reflect the effectiveness of the Company’s internal control procedures.
26. A description of any arrangement or agreement under which a director or a senior executive of the Company has waived any salary or compensation of his.
27. A description of any arrangement or agreement under which a shareholder of the Company has waived any rights to dividends.
28. Statement of the value of any outstanding statutory payment on account of any Zakat, taxes, fees or any other charges with a brief description and statement of the reasons for the same.
29. A statement as to the value of any investments made or any reserves set up for the benefit of the Company’s employees.
30. Declaration that:
a) Proper accounting records have been maintained.
b) The system of internal control is based on a sound design and has been implemented effectively.
c) There are no significant doubts concerning the Company’s ability to continue its operations.
If any of the statements above cannot be made, the report must contain a statement clarifying the reasons for the same.

31. Any other information that is required to be disclosed pursuant to the Regulations issued by the CMA.
32. If the external auditor’s report contains reservations on the relevant annual financial statements of the Company, then the Board report must clarify such reservations, the reasons for the same and any related information.
33. If the Board recommends that the auditor be changed before the end of the term he is appointed for, then the Directors’ report must state the same as well as the reasons for such recommendation.
Article (8): Reporting related to Securities
8.1. The Company must notify the CMA without delay of any significant change in the ownership or identity of those persons holding more than 1% of the Company’s shares or convertible debt instruments.
8.2. The Company must notify the CMA and the public without delay of the following information:
a) any proposed change in the capital of the Company;
b) any decision or recommendation to declare any profits or to pay dividends or to make any other distributions to the holders of its listed securities;
c) any decision or recommendation not to declare any profits or not to pay any dividends which would otherwise have been expected to have been or recommended to have been declared or paid in the normal course of events;
d) any decision to call, repurchase, draw, redeem or propose to purchase any of its securities and the total amount and value thereof;
e) any decision not to make payment in respect of debt instruments or convertible debt instruments; or
f) any change in the rights attaching to any class of listed shares or to the debt instruments convertible to such shares.
8.3. The Company must also promptly notify the CMA and the public of:
a) any change in the Company’s Bylaws or the location of its principal office;
b) any change in its auditors;
c) the presentation of any winding-up petition, the issuing of any winding-up order or the appointment of a liquidator in respect of the Company and its pursuant to the Companies Law, or the commencement of any proceedings under the Bankruptcy Regulations;
d) the passing of a resolution by the Company or any of its affiliates that the Company be dissolved or liquidated, or the occurrence of an event or termination of a period of time which would require the Company go into liquidation or dissolution;
e) the passing of any judgment, decision, declaration or order by a court or judicial authority of competent jurisdiction, whether at first instance or on appeal, which may adversely affect the Company’s utilisation of any portion of its assets which in aggregate value represent a value in excess of 5% of the net assets of the Company; or
f) the call for convening a General Assembly meeting and the meeting agenda.
Article (9): Language of Announcement, Notifications and Reports
9.1. All announcements, notifications and reports issued by the Company shall be in the Arabic language and the Company may translate the same into English.
9.2. The Arabic language is the official language used to explain and interpret all announcements, notifications and reports. In case of discrepancy between the Arabic version and the English version, the Arabic version shall prevail.

Article (10): Information available to Shareholders
10.1. The Company shall ensure that the Shareholders and the public have easy access to the required information and documentation.
10.2. All the Shareholders shall have the right to review the topics and reports issued by the Company, and they shall be entitled to inquire and request information insofar as this would not prejudice the interests of the Company or contradict with the Law.

 



Article (11): Confidential Information
11.1. Information shall be considered to be confidential if it affects the Company’s business and is not required to be disclosed pursuant to the relevant laws and regulations.
11.2. The Company shall take all necessary steps and actions to protect its trade secrets and confidential information.
11.3. Confidential information shall be made exclusively available to the following persons:
a) Members of the Board of Directors;
b) The CEO;
c) The CFO; and
d) The Legal Counsel of the Company.
11.4. The CEO of the Company shall have the right to amend the list of persons, other than the Board members, who have access to confidential information.
11.5. Persons having access to confidential information shall not use such information for their personal interest, nor shall they disclose such information to third parties, failing which, such persons shall be held liable for the breach of this provision.
11.6. Persons who have illegally acquired information relating to the Company’s trade secrets or confidential information shall compensate the Company for any losses incurred as a result thereof.
11.7. The following are examples of confidential information or trade secrets:
a) The Company’s investment opportunities and the studies carried out for such purpose.
b) The contracts and agreements which are the subject matter of negotiation, with the requirement to subsequently comply with the disclosure requirements of the Registration and Listing Rules and the Law.
c) Secrets of production related to the Company products or services.
d) The detailed information relating to the cost of the Company’s products or services.

Article (12): Insider Information
12.1. Insider information is any information which is not available to the public and which relate to the Company’s activities and its shares, and which, if disclosed, may materially affect the market value of the Company’s shares. Information that meets the following criteria shall be considered insider information:
a) Information that directly relates to the Company,and their shares;
b) Information of a specific nature;
c) Any information that is classified as not being public; and
d) Information that, if published, might significantly affect the market value of any of the Company's shares.
12.2. Any individual who has access to review internal information pursuant to any legal judgment, job description or other internal Company policy, shall be deemed an insider.
12.3. The following persons shall be considered insiders:
a) Members of the Board and any other corporate executives or persons involved in the internal control of the Company.
b) Persons employed by the Company or pursuant to their job descriptions, have access to insider information.
c) Persons appointed by governmental or supervisory authorities.
12.4. Insiders shall be prohibited from disclosing insider information or from discussing the same.
12.5. The Board shall adopt procedures for the disclosure and use of insider information.
12.6. The CEO shall be responsible for ensuring compliance with applicable laws and any requirements provided for in Bylaws and other internal control documents to prevent conflicts of interest within the Company and to prevent the improper use of insider information by the employees and business units of the Company.

 

 

 

 

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