Title :

Dividend Distribution Policy

Content :

1.       Introduction

 

1.1   Objective

 

This Dividend Distribution Policy (“Policy”) establishes the framework adopted by Sohar Power Company SAOG (“the Company”) for determining, declaring and disclosing dividends to shareholders, in compliance with Muscat Stock Exchange (MSX) Circular No. (3/2025), the Commercial Companies Law no. (18/2019) and FSA Circular E/42/2025.

 

1.2    Scope

 

This Policy applies to all ordinary dividends declared by the Company in respect of its listed equity shares on the Muscat Stock Exchange.

It governs annual dividends and any other cash distributions to Shareholders approved by the Board of Directors and ratified by the Shareholders’ during forthcoming Annual General Meeting (AGM).

 

1.3    Policy Review and Amendment

 

This Policy shall be reviewed annually or whenever there is a significant change in regulatory requirements, financial position, or business strategy. Any amendments shall require Board approval and immediate public disclosure through the MSX platform.

 

1.4    Objectiveofthe Policy

 

This policy aims to:

 

1.       Ensure compliance with the relevant regulatory requirements,

 

2.       Determine the general provisions for distributing annual or interim profits

 1.       Establish mechanisms to determine the amount, method and dates of Dividends distribution or recommend their distribution and announcement, and,

2.       Continue to achieve a balance between the interests of shareholders, the company and other stakeholders.

 

1.       Share Classes

 

The laws and regulations issued by the relevant regulatory authorities allow companies to issue various classes of shares, whose entitlements to dividends differ from one class to another, as follows:

 

 

a)       Ordinary shares: Ordinary capital shares issued by the company, which are the basic voting shares in General Shareholders' meetings, where each shareholder/investor has the right to participate in the election of the company's Board of Directors, and to receive equally the net profit distributions decided.

b)      Preferred shares: Shares issued by the company that give their owners preferred rights over ordinary shares, and these shares do not give their owners the right to vote in General Shareholders' meetings.

 

At present, the issued and paid-up capital of the Company consists of only one class of shares, which are ordinary shares, which are subject to the provisions and procedures of this Policy.

 

2.       Types of Distributions:

 

The relevant laws and regulations refer to two types of Dividends distributions, as follows:

 

a)       Annual: Dividends paid only once in the fiscal year after the annual accounts are prepared and approved by the Board members, and the Board of Directors has the authority to recommend to the General Assembly to pay Dividends to the entitled shareholders at the time. 

 

3-      Interim: Dividends paid in stages (quarterly/semi-annually) during the fiscal year, provided that the General Assembly authorizes the Board of Directors to do so, by virtue of a resolution issued annually.

 

1.       Key Determinants for Dividend Declaration

 

In determining the amount and timing of any dividend distribution, the Company’s Boardwilltakeintoconsiderationarangeof factors, including but not limited to:

 

 

1.       the Company’s net profits, accumulated retained earnings, and availability of distributable reserves;

2.       cash flow generation, liquidity position, and overall financial flexibility;

3.       planned capital  expenditure, maintenance requirements, and operational funding needs;

4.       the Company’s debt profile, financing arrangements, and compliance with financial covenants;

5.       prevailing regulatory, operational, and market outlook of the power generation and electricity sector in which the Company operates.; and

6.       any applicable legal and regulatory requirement.

 

2.       Policy:

 

 

The process of distributing Dividends is subject to Companies Commercial Law, Regulation for Public Joint Stock Companies and Circular E/42/2025 issued by FSA,  and its controls and provisions are determined by this policy in its amended forms from time to time, the most important of which are the responsibilities of the related parties - each according to its jurisdiction - as follows:

5.1  General Meeting

 

a)       Decide on the proposed distribution of profits based on the recommendation of the Board of Directors, considering the suitability of the distributed amounts to the company's circumstances and not harming the interests of shareholders,

b)      Authorize the Board of Directors to distribute interim profits to shareholders, provided that this authorization is renewed annually in accordance with regulatory controls and procedures.

 

5.2   Board of Directors

 

a)       Implement the General Assembly's decision regarding the distribution of Dividends to registered/entitled shareholders within a period not exceeding (7) business days from the date of entitlement of those Dividends, which is specified by distributing annual or interim Dividends.

b)      Include approval of the disbursement of Dividends (if any) in the Agenda of the General Assembly in a separate item for the Assembly to decide on,

 

5.3   Disclosure

 

The  disclosure  of  the  general  meeting's Resolution or the board of directors·  resolution approving the distribution of cash dividends to investors or the record date set  by  the  board  of  directors  for  interim dividends, must include the start date for transferring dividends to the bank accounts of entitled investors, which in all cases must not exceed the seventh (7th)  business day  from the date of the general meeting or board meeting or record date.

 

 Implementation:

 

The approved cash dividends must be transferred to MCDC within a period not exceeding four (4) business days from the   date of the general meeting or board meeting   or record date and then MCDC shall transfer the dividends to the bank accounts of entitled investors within the period specified.

 

1.       Legal and Regulatory Constraints

 

Dividend distributions shall be made strictly in accordance with the Omani Commercial Companies Law and shall not be declared if:

 

i.                    It negatively affects the joint stock company's ability to pay its debts and financial liabilities on time; or

ii.                   the dividend is paid out of fictitious profits; or

iii.                 The joint stock company has sustained a loss which has not been fully extinguished.

 

No distribution shall be made except for the net profits of the Company after deduction of all the necessary costs and setting aside the depreciations, appropriations and reserves which must be set aside, including any part of the profits allocated by the Company for the increase of the share capital.

 

2.       Unreceived dividends

 

The Company will deposit the unreceived dividend in investors’ trust funds in MCDC.

 

Contact Information:

 

Mr. Salah Issa Al Farsi – Investor Relation Officer

 

Email: [email protected]

 

 

Tel: +968 99219419