Dividend Distribution Policy

1. Introduction

This policy aims to establish the general framework followed by Takaful Oman Insurance SAOG in distributing dividends to shareholders, in a manner that enhances transparency and disclosure to investors and aligns with best practices in corporate governance and the regulatory requirements applicable in the Sultanate of Oman.

The company shall adhere, in implementing this policy, to the provisions of Islamic Shariah and the regulations governing Takaful insurance.

2. Legal and Regulatory Basis

This policy has been prepared in accordance with the following:

• The Commercial Companies Law of the Sultanate of Oman and its Executive Regulations.

• The instructions and guidelines issued by the Muscat Stock Exchange regarding dividend distribution policies under Circular No. 3/2025.

• The Company’s Articles of Association.

• Regulatory requirements issued by the relevant supervisory authorities, including the Financial Services Authority.

• Decisions and directives of the Company’s Sharia Supervisory Committee.

• Sharia standards and controls relevant to Takaful operations.

The declaration and distribution of dividends remain subject to the approval of the Financial Services Authority and the shareholders at the Annual General Meeting.

3. Objective of the Policy

This policy aims to achieve a balance between:

• Providing fair and sustainable returns to shareholders.

• Maintaining the Company’s strong financial position.

• Supporting future growth and expansion plans.

• Complying with capital, solvency and other requirements as applicable to insurance and takaful companies.

The policy also seeks to enhance clarity and transparency regarding the principles relied upon by the Board of Directors when making dividend distribution decisions.

4. Dividend Distribution Intent

The company shall, subject to its financial performance, financial position, and regulatory capital requirements, consider distributing dividends to shareholders on an annual basis.

-      Dividends may take any of the following forms:

• Cash dividends.

• Bonus shares.

• Any other form of distribution permitted under applicable laws and regulations, provided that they do not conflict with Sharia principles.

-      Dividends to shareholders shall be distributed only from the shareholders’ fund profits, and shall not be paid from the participants’ fund or from their underwriting surplus.

-      When recommending dividend distributions, consideration must be given to the surplus or deficit in the participants’ fund, ensuring that such distributions do not adversely affect the financial soundness of the fund or the rights of the participants.

5. Parameters Considered by the Board of Directors

When recommending dividend distributions, the Board of Directors conducts a comprehensive assessment of a range of financial, operational, and regulatory factors, including but not limited to:

First: Financial and Internal Factors

• Net profits achieved and distributable earnings.

• Accumulated reserves and retained earnings.

• Current and projected cash flows.

• Available liquidity and working capital requirements.

• Future business expansion and growth plans.

• Capital expenditure requirements and future investments.

• Solvency margin and capital adequacy requirements in accordance with regulations governing the insurance and takaful sector.

• Surplus / Deficit in the participants’ fund

• Existing financial obligations and financing arrangements, if any.

• Sustainability of earnings and the Company’s ability to maintain stable dividend distributions.

Second: External Factors

• Local and global economic conditions.

• Developments in the insurance and takaful sector.

• Regulatory or legislative changes.

• Investor expectations and market conditions.

The Board of Directors ensures that any dividend recommendation is aligned with the Company’s long-term financial sustainability.

6. Circumstances Where Dividends May Not Be Distributed

Dividend distribution may not be recommended in certain circumstances, including but not limited to:

• Failure to achieve distributable profits during the financial year.

• The need to retain earnings to support expansion plans or strategic investments.

• Increased capital requirements or the need to strengthen solvency margins.

• Unfavourable economic or market conditions.

• Regulatory instructions or restrictions issued by supervisory authorities.

• Any other considerations that the Board of Directors deems necessary to protect the Company’s interests and financial sustainability.

7. Dividend Approval and Distribution Mechanism

• The Board of Directors reviews the Company’s financial performance and recommends dividend distribution, if any.

• The Board’s recommendation is subject to the approval of shareholders at the Annual General Meeting.

• Dividend distribution is generally considered after the approval of the audited annual financial statements.

The Board of Directors may also consider declaring interim dividends during the financial year if the Company’s financial conditions permit and subject to regulatory requirements, subject to the following:

• Realized profits available for distribution.

• Compliance with relevant regulatory requirements.

• No breach of solvency requirements.

• Ensuring that the distribution is in line with Sharia principles governing Takaful operations.

8. Dividend Announcement

Any decision regarding dividend distribution will be announced through:

• The Company’s official website.
• The Muscat Stock Exchange disclosure platform.

The announcement will include the relevant details.

9. Policy Review

This policy will be subject to periodic review by the Board of Directors to ensure its continued suitability in light of regulatory, economic, and strategic developments.

The Board of Directors may amend this policy when necessary, and any amendments will be disclosed in accordance with applicable regulatory requirements.

10. Disclaimer

This policy represents a general guiding framework for the Company’s approach to dividend distribution and does not constitute a commitment or guarantee to distribute dividends in any particular financial year.

The decision to recommend dividends remains at the sole discretion of the Board of Directors, based on the Company’s financial performance, capital and other requirements, and prevailing economic and regulatory conditions, Sharia principles, and Takaful requirements, provided that it does not adversely affect the rights of the participants.

11. Contact Information

For inquiries or additional information regarding the Dividend Distribution Policy, shareholders and investors may contact the Investor Relations Officer through the contact details published on the Company’s official website.