Subject to the recommendation of the Board of Directors and the approval of the General Assembly of Shareholders in accordance with the procedures stipulated in the Companies Law and the By-Laws, the annual net profit of the Company shall be distributed after the deduction of all general expenses and charges, as follows:
ten percent (10%) of the net profit shall be set aside to form the statutory reserve. The ordinary General Assembly of Shareholders (the "Ordinary General Assembly") may discontinue such setting aside when the statutory reserve amounts to fifty percent (50%) of the Company’s capital;
the ordinary General Assembly of Shareholders may, following a recommendation by the Board of Directors, set aside a certain percentage of the net profits to form a reserve for a specific purpose or purposes;
from the remaining net profits, a first dividend payment equal to five percent (5%) of the paid up capital to the Shareholders;
following the first dividend payment, the Board of Directors will be allocated its allowance and finally any remaining net profits will be distributed to the Shareholders as an additional dividend.
The declaration of a dividend will be dependent on such matters as the Company’s earnings, its financial condition, the condition of the markets, the general economic climate and other factors, including analysis of investment opportunities and the reinvestment needs of the Company, its cash and capital requirements, business prospects and any other legal and regulatory considerations and any dividend restrictions under any debt financing arrangements the Company has entered into. In addition, the Company may also take into account the dividend payment practices of other major Saudi Arabian and GCC companies, and international petrochemical operators.
The Nominated Directors do not expect to pay dividends to Shareholders for at least the first four (4) years following the Company's incorporation. Thereafter, payment of dividends will be dependent on sufficient distributable profits being generated by the Company to allow lawful distribution and on the terms of the Facilities, which it is expected will prohibit the Company from distributing dividends unless certain conditions are satisfied and/or certain financial ratios are met. There is no assurance that the Company will distribute dividends in the future nor, in the event of a dividend being paid, of the amount of any such dividends to be distributed. Moreover, the dividend distribution policy may change from time to time.