Title :

Dividend Distribution Policy

Content :

DIVIDEND DISTRIBUTION POLICY

DHOFAR FOODS & INVESTMENT SAOG

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contents

1. INTRODUCTION.. 3

2. REGULATORY & LEGAL BASIS.. 4

3. DIVIDEND PHILOSOPHY.. 4

4. KEY DETERMINANTS FOR DIVIDEND DECLARATION.. 4

5. FORMS OF DIVIDEND.. 5

6. PROCEDURAL FRAMEWORK.. 5

7. TRANSPARENCY & DISCLOSURE. 6

8. AMENDMENT & DISCLAIMER.. 6

9. CONTACT FOR INVESTORS.. 7

 

 

 

 

 

 

 

 

 

 

 

 

 

1. INTRODUCTION

1.1 Objective

This Dividend Distribution Policy (“Policy”) establishes a clear and transparent framework for the determination, declaration, and distribution of dividends to the shareholders of Dhofar Foods & Investment SAOG (“the Company”). The objective is to provide investors with a predictable understanding of how the Company balances shareholder rewards with long-term financial sustainability.

1.2 Scope

This Policy applies to all ordinary dividends, interim dividends, and bonus share issuances. It aligns with the Muscat Stock Exchange (MSX) Capital Market Development initiative to enhance market transparency and support informed investment decisions.

1.3 Responsibility

The Board of Directors (“the Board”) holds the ultimate authority for recommending dividends. The Executive Management, supported by the Finance and Internal Control functions, is responsible for the rigorous financial analysis required to support these recommendations.

2. REGULATORY & LEGAL BASIS

This Policy is prepared and shall be implemented in strict accordance with:

v  MSX Circular No. 3/2025: Regarding Dividend Distribution Policy Guidelines.

v  Oman Commercial Companies Law: (Royal Decree No. 18/2019) and its amendments.

v  FSA Regulations: Including timelines for distribution (Circular E/6/2025). Dated 25/11/2025

v  Company Articles of Association: Regarding profit allocation.

 

 

3. DIVIDEND PHILOSOPHY

The Company views dividends as a vital component of shareholder total return. DFI seeks to adopt a "Residual Dividend Model," which prioritizes capital preservation for operational stability and growth, while distributing surplus cash that is not required for high-return reinvestment.

4. KEY DETERMINANTS FOR DIVIDEND DECLARATION

The Board shall follow a "Prudence Framework" to evaluate the feasibility of any distribution. This ensures that dividends are paid from sustainable sources without compromising the Company's creditworthiness.

4.1 Summary of Determinants (Executive View)

 

4.2 Detailed Analysis of Determinants

·         4.2.1 Profitability & Reserves: The Board distinguishes between core operational profits and one-time windfall gains. No dividend shall be declared if the Company has sustained a loss that has not been fully extinguished.

·         4.2.2 Cash Flow vs. Accounting Profit: DFI prioritizes cash-backed dividends. The Board analyzes the "Quality of Earnings" to ensure that profit is reflected in the bank balance.

 

 

·         4.2.3 Debt Service & Covenants: The Board assesses the Company's "Gearing Ratio" (Debt-to-Equity). If leverage is high, the Board may prioritize de-leveraging to lower interest costs before increasing payouts.

·         4.2.4 Statutory Reserves: In accordance with Omani Law, 10% of net profit must be transferred to the Legal Reserve until it reaches one-third of the share capital before any dividend is distributed.

                   

5. FORMS OF DIVIDEND

Subject to regulatory approval and the Company's needs, distributions may take the following forms:

5.1Cash Dividends: The standard monetary return to shareholders.

5.2Bonus Shares (Stock Dividends): Issued to increase share capital and reward shareholders while retaining cash for strategic projects.

5.3DRIP (Dividend Reinvestment Plan): Allowing shareholders to reinvest cash dividends back into DFI shares.

6. PROCEDURAL FRAMEWORK

6.1 Frequency

The Company intends to distribute dividends annually following the close of the financial year (31 December). The Board may consider interim dividends at its discretion if the half-year results show exceptional liquidity and profitability.

6.2 Approval & Timeline

·         Recommendation: Proposed by the Board following the audit of financial statements.

·         Ratification: Approved by shareholders at the Annual General Meeting (AGM). Shareholders may vote to reduce, but not increase, the recommended dividend.

·         Payment: Handled via Muscat Clearing & Depository (MCD) within the legal timeframe prescribed by the FSA.

 

 

7. TRANSPARENCY & DISCLOSURE

DFI is committed to bilingual (Arabic/English) disclosure. This Policy and all dividend-related announcements (Declaration Date, Record Date, Ex-Dividend Date, and Payment Date) shall be published on:

·         The Company’s Official Website (Investor Relations section).

·         The MSX Disclosure Platform.

8. AMENDMENT & DISCLAIMER

8.1 Amendment

The Board reserves the right to amend this Policy periodically to reflect changes in the Omani tax environment, market conditions, or Company strategy. Any change will be disclosed immediately via the MSX.

8.2 Disclaimer

This Policy is a statement of intent and does not constitute a legal commitment to pay a dividend in any given year. Actual payment is always subject to financial performance, regulatory approval, and the Board’s assessment of the Company's best interests.

 

9. CONTACT FOR INVESTORS

For further information regarding this policy or dividend history, please contact:

Mr. Salim Mohammed Salim Koofan

Investor Relations Officer
Dhofar Foods & Investment SAOG
Email: [email protected] : Tel: 99876676