Title :

Dividend Distribution Policy

Content :

1. Framework & Purpose

This Dividend Distribution Policy (“Policy”) establishes the framework governing the declaration, recommendation, approval, and payment of dividends by Salalah Port Services Company SAOG (the “Company”) in accordance with:

•The Oman Commercial Companies Law (as promulgated by Royal Decree No. 18/2019), and any other applicable laws as and when they come into effect;

•Regulations issued by the Financial Services Authority, and any other applicable regulations as and when they come into effect;

•Listing and disclosure requirements of the Muscat Stock Exchange, and any other applicable circulars and requirements as and when they come into effect;

•The Company’s Articles of Association, Code of Governance, and other policies as and when they come into effect.

The objective of this Policy is to provide transparency to shareholders regarding the Company’s approach to dividend distribution while maintaining financial sustainability and supporting future growth.

 

2. Scope

This Policy applies to the distribution of dividends to shareholders holding the Company’s ordinary shares listed on the Muscat Stock Exchange and registered with the Muscat Clearing and Depository Company (MCD).

It covers:

•Annual dividends;

•Interim dividends (if applicable);

•Special dividends (if applicable); and

•Bonus share distributions (if applicable).

 

 

3. Authority for Dividend Declaration

3.1 Board Recommendation

The Company’s Board of Directors shall review the Company’s financial performance and recommend the amount and nature of dividend distribution to shareholders. Such recommendations are typically cash dividends on an annual basis.

3.2 Shareholder Approval

Final dividends shall be approved by shareholders at the relevant Company General Meeting following the recommendation of the Company’s Board of Directors. 

3.3 Interim Dividends

The Company’s Board of Directors may approve interim dividends during the financial year as permitted, by applicable law and regulations, and supported by the Company’s financial position and strategic objectives.

 

4. Dividend Distribution Principles

The Company aims to maintain a balanced and sustainable dividend policy that:

•Provides reasonable returns to shareholders;

•Maintains sufficient reserves for business growth;

•Remains in line with Company & shareholder strategic objectives;

•Ensuring financial stability; and

•Complies with all applicable regulatory requirements.

Dividend payments are not guaranteed and remain subject to profitability, liquidity, and applicable restrictions.

 

5. Statutory Requirements and Reserves

5.1 Legal Reserve

In accordance with the Oman Commercial Companies Law, the Company shall transfer:

•10% of annual net profits to a legal reserve;

•Until the reserve reaches at least one-third (33%) of the Company’s share capital. 

The legal reserve may not be distributed as dividends except in specific circumstances allowed by law.

5.2 Optional Reserves

The Company may allocate up to 20% of annual net profits (following tax and legal reserve deductions) to optional reserves which may later be used for dividend distributions subject to shareholder approval. 

 

6. Conditions for Dividend Distribution

Dividends may only be distributed when:

•The Company has distributable net profits;

•All expenses, provisions, depreciation, and statutory reserves have been deducted;

•The distribution does not impair the Company’s ability to meet financial obligations; 

•No applicable limitations or restrictions are breached, or will be breached, as a result of the relevant dividend distribution;

•Any accumulated losses have been fully covered; and

•The necessary approvals therefor have been made. 

Dividend distributions based on fictitious or unrealized profits are prohibited.

 

7. Dividend Payout Guidelines

Subject to the Company’s financial performance, strategic objectives, and any other matters listed herein this Policy, the Company’s Board of Directors may recommend distributing a portion of net profits after tax as dividends.

The dividend payout ratio will depend on:

•Profitability;

•Cash flow availability;

•Capital expenditure requirements;

•Debt service obligations;

•Strategic objectives, investments, and expansion plans;

•Retained earning availability; and

•Economic and market conditions and outlook.

 

8. Disclosure and Announcement Requirements

The Company shall announce dividend decisions in accordance with applicable dividend disclosure requirements. This shall mainly be through official Company communication channels, and the Muscat Stock Exchange’s disclosure system as accessible on the Muscat Stock Exchange website.

 

9. Dividend Payment Timeline

Following regulatory guidance from the Financial Services Authority, dividend payments shall be transferred to shareholders within a maximum of seven (7) working days from the relevant approval or record date. 

Payments are typically processed through the MCD.

 

10. Unclaimed Dividends

Unclaimed dividends shall be deposited with the designated regulatory fund in accordance with the Oman Commercial Companies Law and may ultimately transfer to the regulator after the statutory period if not claimed by shareholders. 

 

11. Policy Review and Amendments

The Company’s Board of Directors reserves the right to review and amend this Policy. This may be done as a result of market conditions, Company strategic objectives, and / or to ensure compliance with applicable laws and regulatory developments.

Any amendments to this Policy shall be approved by the Company’s Board of Directors and disclosed in accordance with the applicable disclosure requirements.

 

12. Contact Information

The contact person for this Policy shall be the Company’s Investor Relations Officer, unless otherwise disclosed by the Company in accordance with its policies and procedures.

 

Sincerely,

Laith Al Ghassani

Legal Manager, & Interim Secretary

Salalah Port Services Company SAOG