Title :

Dividend Distribution Policy – Al Maha Ceramics SAOG

Content :

1.       Purpose of the Policy

In accordance with Muscat Stock Exchange (MSX) Circular No. 3/2025, which provides guidelines for transparent and structured dividend policy disclosure by listed companies, and pursuant to the regulatory requirements issued by the Financial Services Authority (FSA)—including enhanced dividend distribution timelines and disclosure obligations for public joint-stock companies the disclosure standards and corporate governance norms applicable to listed entities shall mutatis mutandis apply to Al Maha Ceramics SAOG (hereinafter referred to as “the Company”).

Accordingly, this Dividend Distribution Policy (“the Policy”) is formulated to voluntarily adopt and align with the practices, governance expectations, and transparency standards prescribed under the MSX and FSA regulatory framework.

2.       Objective of the Policy

The objective of this Policy is to establish the key parameters and guiding principles that the Board of Directors of the Company shall consider when declaring or recommending a dividend for any financial year. These parameters ensure that dividend decisions are taken in a consistent, transparent, and financially prudent manner, aligned with the Company’s performance, regulatory requirements, and long‑term shareholder value.

For this Policy, the term “Dividend” shall include Final Dividend, Interim Dividend, and the issuance of Bonus Shares, as may be declared in accordance with applicable laws and regulations.

 

3.       Parameters to Be Considered While Declaring or Recommending Dividend

The Board of Directors shall consider the following financial and strategic parameters when evaluating any proposal to declare or recommend a dividend:

3.1.   Financial Factors

• Profitability of the current financial year, based on audited financial statements prepared in accordance with applicable International Financial Reporting Standards (IFRS) and Omani regulatory requirements.
• Accumulated retained earnings, including profits from previous financial years available for distribution under applicable laws.
• Working capital requirements, including liquidity needs for inventory, raw materials, operational expenses, and cash flow stability.
• Capital expenditure (CAPEX) and infrastructure requirements, including funds needed for maintenance, upgrades, environmental compliance, and plant expansion.
• Investment requirements in subsidiaries, joint ventures, based on the Company’s long‑term strategic growth plans.
• Availability of free cash reserves to address unforeseen contingencies, economic shocks, or industry-specific operational risks.
• Any other financial considerations (such as the Gearing ratios and the availability of facilities) or material events that may influence the Company’s ability to sustain dividend payments responsibly.

 

3.2.   Internal and External Factors

Internal Factors

• The Company’s strategic priorities, including business expansion, capacity enhancement projects, and diversification plans.
• Contractual obligations or restrictions, including debt covenants, banking facilities, or financing arrangements that may affect distribution capability.
• Operational considerations such as plant turnaround schedules, raw material volatility, and ongoing capital projects.

 

External Factors

• Macroeconomic conditions, including inflation, interest rates, and currency fluctuations affecting business performance.
• Industry dynamics, competitive intensity, demand cycles, and regulatory developments affecting the tiles sector.
• Regulatory compliance, including adherence to requirements stipulated by the Financial Services Authority (FSA) and Muscat Stock Exchange (MSX) for listed companies.
• Taxation policies or changes that may impact distributable profits or shareholder returns.
• Any other relevant internal or external events considered material by the Board.
  
  

4.       Circumstances Under Which Shareholders May Expect Dividend

The Board of Directors shall declare or recommend dividends only after ensuring full compliance with the regulatory requirements applicable to public joint‑stock companies under the Financial Services Authority (FSA) and the Muscat Stock Exchange (MSX), including mandatory disclosures related to dividend declaration, record dates, and payment timelines.

While assessing dividend distribution for any financial year, the Board shall take into consideration:

• The recommendations of the Company’s management regarding operational performance, liquidity, and long‑term financial planning.
• Existing and planned capital investments required for growth, modernization, or capacity expansion.
• The financial parameters and internal/external factors outlined in this Policy.
• Dividends for a financial year are generally expected to be distributed once annually, based on the net profits earned during the year, subject to Board and shareholder approvals. The Board may, at its discretion, also:

• Declare interim dividends based on interim financial results, or
• Declare dividends out of retained earnings, provided such distributions comply with applicable regulatory rules and preserve the Company’s financial stability.

 

·       Declare Bonus Shares

In addition to cash dividends, the Board of Directors may recommend the issuance of Bonus Shares to shareholders by capitalizing a portion of the Company’s reserves and/or Private Placement, in accordance with applicable laws and regulatory requirements. Bonus share issuance may be considered when the Company has sufficient free reserves or share premium balances to support capitalization without adversely affecting liquidity and may be recommended by the Board as a means to maintain an optimal capital structure, enhance share liquidity, and align the paid‑up capital with the Company’s long‑term growth plans and asset base.

 

5.       Disclosure Requirements

All dividend-related announcements shall be disclosed through:

The Muscat Stock Exchange (MSX) official disclosure platform, in accordance with MSX’s guidelines requiring clear and transparent dividend policy communication for listed companies.

Disclosures must clearly include:

·       The dividend amount per share,

• The record date or eligibility date,
• The date on which dividend transfers will begin, as mandated by the FSA,
• Any additional information affecting the distribution process.

 

6.       Payment Timeline

Dividend payments shall strictly follow the Financial Services Authority (FSA) directive requiring the completion of the entire dividend distribution cycle within the timelines prescribed by FSA from the approval date.

This ensures that the full dividend distribution process is completed within the prescribed timeline provided by FSA.

 

7.       Approval Process

Dividend declaration shall follow the statutory corporate governance and regulatory framework applicable to public joint‑stock companies under the Financial Services Authority (FSA) and the Muscat Stock Exchange (MSX). Accordingly:

• The Board of Directors shall recommend the dividend as per the company’s policy.
• The recommended annual dividend shall be submitted to the General Meeting of Shareholders (GMS) for approval, in accordance with applicable regulatory requirements.
• Interim dividends, where declared, may be approved solely by the Board, provided all regulatory and financial criteria are met.
• Dividend distribution shall commence only after all required approvals have been obtained, and the Company shall adhere to the FSA‑mandated payment timeline.

8.       Amendments

The Board of Directors reserves the right to review, revise, or amend this Dividend Distribution Policy at any time, to ensure continued alignment with:

• Changes in FSA or MSX regulations governing listed companies, including updates to disclosure norms and dividend distribution procedures.
• The Company’s strategic priorities, financial position, or operational environment.
• Evolving best practices in corporate governance for public joint‑stock companies.

Any material amendments to this Policy shall be disclosed through the MSX official disclosure platform and in compliance with FSA and MSX transparency requirements.