Tanker Size Classes
Chart 7.1: Bahri Group Structure
13. SUMMARY OF THE COMPANY'S BY-LAWS
The current provisions of the By-Laws are summarised below.
13.1 Name of the Company
The National Shipping Company of Saudi Arabia, a Saudi Joint Stock Company.
13.2 Head Office
The head office of the Company is in Riyadh, Saudi Arabia with two branches in Jeddah and Dammam. The Board of Directors may open branches, offices or agencies within or outside of Saudi Arabia.
13.3 Objectives of the Company
The objectives of the Company are as follows:
Purchase and sell vessels and other floating means of transportation to support transporting cargos heading to Saudi Arabia regularly and to maintain cargo prices consistency and ensure transportation of national security demands at all times;
Transport Saudi Arabian exports;
Transport passengers, goods, commodities and livestock to and from Saudi Arabia by sea;
Recruit Saudi engineers, officers and seamen to work on vessels, at dry docks in the maintenance of vessels and in other shipping related activities and to train Saudi nationals in these areas;
Participate in all activities related to marine transportation such as salvage, shipping agency, brokerage, cargo clearance, stowage, storage and other activities related to the shipping industry;
Obtain concessions, benefits or rights from different governments with the aim to serve the Company's interests;Undertake all activities related to the facilitation of tourism and Hajj, Import and export of shipping equipment;
Enter into any transactions, contracts and take any actions that relate or connect, for any reason, to its objectives which the Company sees necessary and appropriate to achieve all or some of its objectives or facilitate such achievements;
Participate in establishing any other company, or invest in it, or acquire its assets and its businesses both inside and outside Saudi Arabia, which relates to the Company business; and
Own any immovable assets that's the Company sees necessary to achieve any of its objectives in any part of Saudi Arabia or abroad, and to register the same under its name with all ministries and other appropriate government authorities, and to invest such assists directly or through leasing or by any other means.The Company may, to meet its objectives and goals, work on supporting the Saudization of its jobs within vessels employees, support maritime navigation education in Saudi Arabia,
develop a national special registrar for vessels, establish a national assembly for maritime navigation, and use maintenance and repairs centres available in the country.
13.4 Term of the Company
The Company has an unlimited term.
13.5 Capital of the Company
The share capital of the Company is SAR 3,937,500,000, consisting of 393,750,000 Shares with a nominal value of SAR 10 per share. Shares should not be issued at less than the par value.
13.6 Share Register
The Shares shall be transferred by recording such transfers in the E-Shareholders' register in accordance with the Capital Market Law and its implementing regulations. The transfer of title to a Share shall not be effective vis-à-vis the Company or any third party except from the date on which the transfer is recorded in such E-Shareholders' register in accordance with the laws and regulations that regulate shares transfer. Ownership of the Shares by a Shareholder entails the acceptance by the Shareholder of the Company's By-Laws and his submission to the resolutions duly passed by the General Assemblies.
13.7 Increase of Capital
The Extraordinary General Assembly may issue a resolution (based on a recommendation by the Board) to increase the Company's capital by issuing new Shares having the same nominal value as the original Shares, provided that the original Shares have been paid in full. If the new Shares are issued at a price higher than their nominal value, any such amount in excess of the nominal value shall be added to the Company's statutory reserve after deducting any related expenses. Such resolution should specify the amount of the increase, the price at which the Shares will be issued and whether the existing shareholders will have priority to subscribe for the Shares issued pursuant to such increase.
13.8 Decrease of Capital
The Company may reduce its capital by a resolution of the Extraordinary General Assembly based on a recommendation made by the Board. Such resolution shall specify the amount of the reduction and method for undertaking such reduction.
13.9 Debt Instruments
The Company may issue debt instruments (such as bonds and sukuk), both in Saudi Riyals or other currencies, and for any length of time, either in one or several parts or through a series of issuances under one or more programs established by the Company from time to time. The Board of Directors also have full powers to determine and report the amount and terms and conditions of these debt instruments, provided that the total loans and debt instruments outstanding does not exceed three times the shareholders' equity in the Company according to the latest audited financial statements of the Company.
13.10 Constitution of the Board of Directors
The Board comprises of nine members, three of whom are appointed by the Government (represented by the Public Investment Fund). The Shareholder Saudi Aramco Company for Development shall appoint two members and the remaining four members are elected to the Board by the General Assembly, excluding the Public Investment Fund and Saudi Aramco Company for Development.
Post the expiry of the Board's term on 31/12/2016G, the General Assembly shall elect all nine members of the Board by way of accumulative voting method in accordance with the Corporate Governance regulations, as amended from time to time, issued by the Capital Market Authority.
The term of the Board is three years.
13.11 Qualification Shares
Each member of the Board shall be a holder of a number of Shares no less than one thousand Shares. Such Shares shall be deposited in a bank designated by the Minister of Commerce and Industry within 30 days from the date of the appointment of the Director. Should a Director fail to submit such qualification Shares within the specified period, his appointment to the Board shall be deemed null and void.
13.12 Vacancies
A Director's membership of the Board shall be terminated upon the expiry of the Board's term, on the Director's resignation or death or if he becomes ineligible, based on the Board's view, to pursue his duties as a director pursuant to any applicable laws or regulations in the Kingdom. If the seat of a Director becomes vacant, the Board may appoint a temporary member to the vacant seat, provided that such appointment shall be laid before the next Ordinary General Assembly. The new Director shall complete the rest of his predecessor's term.
If the number of Directors falls below the quorum required for a Board meeting, an Ordinary General Assembly must be convened as soon as possible to appoint new Directors to the vacant seats on the Board.
13.13 Powers of the Board of Directors
Without prejudice to the powers conferred on the General Assembly, the Board shall be vested with the widest powers to manage the business of the Company inside and outside Saudi Arabia. Furthermore, the By-laws of the Company lists, by way of example, a number of specific powers the Board has.
The Company's By-Laws do not provide any authority to be given to the Board of Directors or the Chief Executive to have the right to vote on a contract or proposal in which they have an interest or to vote on their remunerationsor the right to borrow from the Company.
13.14 Chairman, Vice Chairman and Secretary
The Board shall appoint a Chairman and Vice Chairman from among its members. The Chairman shall have the power to convene the Board to meet, preside over its meeting and represent the Company.
The Board of Directors shall appoint a Secretary from among its members or otherwise and shall specify his duties and remuneration.
13.15 Board Meetings
The Board of Directors shall be convened upon notice given by the Chairman or the Director presiding over the Board in his absence. The Chairman shall call a meeting of the Board if so requested in writing by any two Directors. The Board shall convene at least four times a year.
13.16 Quorum and Representation
A Board meeting shall be quorate only if attended by at least 50 per cent. of the Board members. A Director may appoint in writing another Board member to attend a Board meeting as his proxy and such proxy shall have two votes. It is not permissible for a Board member to represent more than one Director at the same meeting.
Resolutions of the Board shall be adopted with the approval of the majority vote of the members present. In case of an equality of votes, the Chairman of the Board or the Director presiding over the Board in the absence of the Chairman shall have a casting vote.
The Board may, when it sees necessary, pass resolutions by way of circular unless one of the Directors requested in writing to convene a meeting to discuss such resolutions. Such resolutions were passed by way of circular shall be discussed represented to the Board of Directors at the first meeting follows passing such resolutions.
13.17 Minutes of Meetings
Deliberations and resolutions of the Board shall be recorded in the form of minutes. Such minutes shall also be recorded in a register to be signed by the Chairman and the Secretary.
Board members who expressed an opposing opinion to the resolution that was passed at the Board meeting may request to record their opposing opinion in such register.
13.18 Committees of the Board
The Board of Directors may appoint an appropriate number of committees as per the Company's requirements. The Board of Directors shall specify the term, powers and purpose of each committee and shall also specify how the Board will supervise such committee.
The Company's By-Laws does not include any other provisions relating to the Company's administrative and supervisory affairs and its monitoring committees.
13.19 General Assembly
A General Assembly that is duly convened is deemed to represent all of the Shareholders and as such any resolutions that are passed at a General Assembly shall be binding on all of the Shareholders. Any Shareholder who holds 10 Shares has the right to attend a General Assembly. Each Shareholder may authorise in writing another Shareholder (other than a member of the Board of Directors or employees of the Company) to attend the General Assembly on his behalf. The Shareholders may participate and vote in the General Assembly meetings via electronic means in a accordance with the relevant rules and regulations issued by the relevant authorities.
13.20 Ordinary General Assembly
The general meetings of the Shareholders are either Ordinary General Assemblies or Extraordinary General Assemblies. With the exception of those matters specifically reserved for Extraordinary General Assemblies, Ordinary General Assemblies shall have full jurisdiction over all matters related to the Company. Ordinary General Assemblies must be convened at least once a year, within six months following the end of the Company's fiscal year at the Company's head office or at the place and time announced in the invitation for the meeting.
13.21 Extraordinary General Assembly
Without prejudice to the limitations set out in the Companies Law, the Extraordinary General Assembly shall have the power to:
amend the Company's By-Laws;
dissolve the Company or merge with another company or establishment;
dispose of the business which the Company was incorporated to undertake; and
increase or reduce in the Company's capital.
Furthermore, the Extraordinary General Assembly may pass resolutions on matters falling within the competence of the Ordinary General Assembly, subject to the same requirements applicable to the Ordinary General Assembly.
13.22 Manner of Convening General Assemblies
The General Assembly may be convened by the Board of Directors. The Board of Directors must convene a meeting of the Ordinary General Assembly if requested to do so by the auditors or by Shareholders representing at least five per cent. of the Company's capital. The Company must publish an invitation to Shareholders to attend the General Assembly in the Official Gazette and in a daily newspaper circulated in the location of the head office of the Company, at least 25 days prior to the date of the General Assembly. The invitation must include the agenda of the meeting. Alternatively, the Company may send a notice containing the invitation to the Shareholders to attend the General Assembly by registered mail during the period set out above. A copy of the notice and the agenda shall also be sent during the notice period set out above to the Companies Department at MOCI.
13.23 Quorum of Ordinary General Assembly
A meeting of the Ordinary General Assembly shall be quorate if attended by Shareholders representing at least 50 per cent. of the Company's capital. If such quorum is not present at the first meeting, a second meeting shall be held within 30 days following the time set for the first meeting. The quorum for such second meeting shall be any number of Shares represented in such second meeting.
13.24 Quorum of Extraordinary General Assembly
A meeting of the Extraordinary General Assembly shall be quorate if attended by Shareholders representing at least 50 per cent. of the Company's capital. If such quorum is not present at the first meeting, a second meeting shall be convened in the same manner as set out for the Ordinary General Assembly. The Companies Law provides that the quorum for such second meeting shall be the attendance by Shareholders representing at least 25 per cent. of the Company's capital.
13.25 Voting Rights
Each Shareholder shall have one vote for each Shares he owns or represents at the General Assembly.
The Company's By-Laws does not include any provisions related to the rights or limitations related to the Company's shares or any other securities as well as any provisions regulating the amendment of the rights attaching to, or the classes of, the securities.
13.26 Voting Majorities
Resolutions of the Ordinary General Assembly shall be passed if supported by an absolute majority of the Shares represented at the meeting. Resolutions of the Extraordinary General Assembly shall be passed if supported by a majority of at least two-thirds (2/3) of the Shares represented at the meeting. If the resolution to be adopted at the Extraordinary General Assembly relates to an increase or reduction of the Company's share capital, dissolving the Company prior to the expiry of its term or merging the Company with another company or establishment, then such resolution shall be passed if supported by a majority of at least three- quarters (3/4) of the Shares represented at the meeting.
13.27 Proceedings of the General Assembly
The General Assembly shall be presided over by the Chairman or the Director presiding over the Board in his absence. The Chairman shall appoint a secretary for the General Assembly, pending on the General Assembly approval of such appointment. A list shall be prepared showing the names of the Shareholders present in person or represented by proxy, the number of the shares held by each, the number of votes attaching to such Shares. Any interested person shall be able to view such list.
13.28 Appointment of Auditor
The Company shall have one auditor or more to be selected from the auditors licensed to practice in Saudi Arabia. The auditor shall be appointed by the General Assembly which shall determine its compensation. The auditor shall audit the Company's accounts both inside and outside the Kingdom relating to the year for which it was appointed.
13.29 Financial Year
The Company's fiscal year shall commence on 1 January and expire on 31 December of each Gregorian year.
13.30 Annual Accounts
The Board of Directors shall prepare at the end of each fiscal year an inventory of the Company's assets and liabilities, the Company's balance sheet and profit and loss account, a report on the Company's activities and its financial position for the preceding year and its proposals as to the distribution of the net profits. The Board of Directors shall prepare such documents at least 60 days prior to the convening of the annual Ordinary General Assembly.
The Board of Directors shall provide such documents to the auditor at least fifty five days prior to the time set for convening the annual Ordinary General Assembly. Such documents shall be signed by the Chairman of the Board and a set thereof shall be available at the Company's head office for inspection by Shareholders at least 25 days prior to the time set for convening the General Assembly. The Chairman shall prompt the Company's balance sheet, profit and loss account, a comprehensive summary of the Board of Directors' report, and the full text of the auditor's report to be published in a newspaper circulated in the city where the Company's head office is located, and shall send copies of such documents to the Companies Department at MOCI at least 25 days prior to the date set for convening the annual Ordinary General Assembly.
13.31 Distribution of Annual Profits
After deducting all general expenses and other costs, the Company's annual net profits shall be allocated as follows:
10 per cent. of the annual net profits shall be set aside to form a statutory reserve.
Such setting aside may be discontinued by the Ordinary General Assembly when the statutory reserve totals one-half (1/2) of the Company's capital; and
the remainder shall be distributed to the Shareholders.
13.32 Dissolution and Liquidation
When the Company's losses equal (3/4) of its capital, the Board of Directors must convene an Extraordinary General Assembly meeting to decide on the dissolving the Company or continuing its business. In the event the Extraordinary General Assembly decided to dissolve the Company, an Extraordinary General Assembly shall determine the method of liquidation and appoint the liquidator. The Board's mandate will expire upon the appointment of a liquidator but the General Assembly's authority shall last throughout the liquidation period.
13.33 The Companies Law
The Companies Law shall apply to all other matters not specifically provided for in the By- Laws.
14. LEGAL INFORMATION