The 33 Ordinary General Assembly Meeting of Al Rajhi Bank by means of modern technology 21/03/2023

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The 33^rd Ordinary General Assembly Meeting of Al Rajhi Bank by means of modern technology

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The 33 rd Ordinary General Assembly Meeting of Al Rajhi Bank by means of modern technology 21/03/2023

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Meeting Agenda

Item

#

Reviewing and discussing the Board of Directors report for the fiscal year ended 31^st December 2022.

1

Reviewing and discussing the financial statements for the fiscal year ended 31^st December 2022.

2

Voting on the Bank’s Auditor report for the fiscal year ended 31^st December 2022 after discussing it.

3

Voting on releasing the Board of Directors Members from their liabilities for the fiscal year ended 31^st December 2022.

4

Voting on the Board of Directors recommendation to distribute cash dividends of SAR (5000) Million to shareholders for the fiscal year ended on December 31, 2022, estimated at SAR (1.25) per share, representing (12.5%) of the face value of share. Accordingly, total distributed dividends for the fiscal year ended on December 31, 2022 is SAR (5,000) Million, estimated at SAR (1.25) per share, representing (12.5%) of the face value of share.

The eligibility of dividends shall be for the Bank’s shareholders who own shares at the end of the trading day of General Assembly meeting and who are registered at Securities Depository Center (Edaa) at the end of the second trading day of General Assembly meeting noting that dividends distribution commences on Sunday, 02/04/2023.

5

Voting on the delegation of the Board of Directors to distribute interim cash dividend on semi-annually or quarterly basis for the fiscal year 2023.

6

Voting on the appointment of the Bank’s external auditors, from among nominees, based on Audit Committee recommendation, to examine, review and audit the primary financial statements for the first, second and third quarter financial statements, annual financial statements for the fiscal year 2023, and the first quarter of the fiscal year 2024, and to approve their fees.

7

Voting on the payment of SAR (4,946,438) as remunerations and compensations to the Members of the Board of Directors for the period from 1^st January 2022 to 31^st December 2022.

8

Voting on the payment of SAR (975,000) as remunerations and compensations to the Members of Audit Committee for the period from 1^st January 2022 to 31^st December 2022.

9

Voting on amending Board Audit & Compliance Committee charter. (Attached) 10

Voting on the Board of Directors Resolution to appoint Mr. Waleed bin Abdullah Al Mogbel as Executive Board Member (Managing Director) to the Board of Directors starting from date of appointment on 09-11-2022 until end of the current term of the Board of Directors on 13-11-2023 replacing the previous Board member Mr.

Stephano Paulo Bertamini. (CV attached) 11

Voting on delegating the Ordinary General Assembly authorization powers stipulated in Paragraph (1) of Article (27) of the Companies Law to the Board of Directors, for one year from the General Assembly approval date or until the end of the term of the delegated Board of Directors, whichever is earlier, pursuant to the conditions related to listed join stock companies which contained in the Implementing Regulations of Companies Law.

12

Voting on the business and contracts concluded between the Bank and Al Rajhi Company for Cooperative Insurance, in which the Chairman of the Board of Directors Mr. Abdullah bin Sulaiman Al Rajhi and the Managing Director and CEO Mr. Waleed bin Abdullah Al Mogbel have an indirect interest, being board members of the Company’s Board of Directors. The transactions contain a contract of Micro and Small Business Motor Insurance, at arm’s length basis, for a period of one year with a value of SAR 27,662,596 for 2022. (Attached)

13

Voting on the business and contracts concluded between the Bank and Al Rajhi Company for Cooperative Insurance, in which the Chairman of the Board of Directors Mr. Abdullah bin Sulaiman Al Rajhi and the Managing 14

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Director and CEO Mr. Waleed bin Abdullah Al Mogbel have an indirect interest, being board members of the Company’s Board of Directors. The transactions contain a contract of Banker’s Blanket Bond and Professional Indemnity Insurance, at arm’s length basis, for a period of one year with a value of SAR 12,056,443 for 2022.

(Attached)

Voting on the business and contracts concluded between the Bank and Al Rajhi Company for Cooperative Insurance, in which the Chairman of the Board of Directors Mr. Abdullah bin Sulaiman Al Rajhi and the Managing Director and CEO Mr. Waleed bin Abdullah Al Mogbel have an indirect interest, being board members of the Company’s Board of Directors. The transactions contain a contract of Directors and Officers Insurance, at arm’s length basis, for a period of one year with a value of SAR 4,010,160 for 2022. (Attached)

15

Voting on the business and contracts concluded between the Bank and Al Rajhi Company for Cooperative Insurance, in which the Chairman of the Board of Directors Mr. Abdullah bin Sulaiman Al Rajhi and the Managing Director and CEO Mr. Waleed bin Abdullah Al Mogbel have an indirect interest, being board members of the Company’s Board of Directors. The transactions contain a contract of Properties All Risk Policy, at arm’s length basis, for a period of one year with a value of SAR 2,309,517 for 2022. (Attached)

16

Voting on the business and contracts concluded between the Bank and Al Rajhi Company for Cooperative Insurance, in which the Chairman of the Board of Directors Mr. Abdullah bin Sulaiman Al Rajhi and the Managing Director and CEO Mr. Waleed bin Abdullah Al Mogbel have an indirect interest, being board members of the Company’s Board of Directors. The transactions contain a contract of Fire and Allied Perils – Mortgage Insurance Agreement, at arm’s length basis, for a period of one year with a value of SAR 6,538,885 for 2022. (Attached) 17

Voting on the business and contracts concluded between the Bank and Al Rajhi Company for Cooperative Insurance, in which the Chairman of the Board of Directors Mr. Abdullah bin Sulaiman Al Rajhi and the Managing Director and CEO Mr. Waleed bin Abdullah Al Mogbel have an indirect interest, being board members of the Company’s Board of Directors. The transactions contain a contract of Bancassurance Agreement, at arm’s length basis, for a period of one year with a value of SAR 80,504,252 for 2022. (Attached)

18

Voting on the business and contracts concluded between the Bank and Al Rajhi Company for Cooperative Insurance, in which the Chairman of the Board of Directors Mr. Abdullah bin Sulaiman Al Rajhi and the Managing Director and CEO Mr. Waleed bin Abdullah Al Mogbel have an indirect interest, being board members of the Company’s Board of Directors. The transactions contain a contract of Motor Insurance Agreement, at arm’s length basis, for a period of one year with a value of SAR 421,377,668 for 2022. (Attached)

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Attachment regarding item # 5

Details of the proposed dividends to be distributed to

shareholders for financial year ending on December 31, 2022

Details of the proposed dividends to be distributed to shareholders for financial year ending on December 31, 2022, approved by the Board of Directors’ decision on 12/01/2023

Total amount Proposed for distribution

Number of Shares Eligible for Dividends

Dividend per share

Percentage of Dividend to the Share Par Value

Eligibility date

Distribution Date

SAR 5,000

Millions

4,000 Million

Shares SAR 1.25 % 12.5 21/03/2023 02/04/2023

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Amending the audit and compliance committee regulations

Article Before Update After Update

8.8 8.8 Duties related to Anti-Fraud:

1. Periodically evaluating the Bank’s policy in combating financial fraud to verify that it is effectively implemented.

2. Recommend to the Board to approve the Bank’s strategy of combating financial fraud and Anti- fraud policy.

3. Set a mechanism to follow up on the recommendations and

corrective actions adopted by the committee.

8.8 Duties related to Anti-Fraud:

1. Periodically evaluating the Bank’s policy in combating financial fraud to verify that it is effectively

implemented.

2. Recommend to the Board to approve the Bank’s strategy of combating financial fraud and Anti-fraud policy.

1. Set a mechanism to follow up on the

recommendations and corrective

actions adopted by the committee.

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CV template

Candidate CV Form 1. Personal Information

Full Name Waleed bin Abdullah bin Ali Al Mogbel

Nationality Saudi Date of Birth 04/05/1976

2. Academic Qualifications

No. Degree Major Date of Award University

1 PhD Audit 2006 Cardiff University

2 Master Finance 2003 Southampton University

3 Bachelor Accounting 1999 King Saud University

3. Experiences

No. Period Experience Field

1 2020 until present CEO - Al Rajhi Bank

2 2019-2020 Deputy CEO - Al Rajhi Bank

3 2014-2018 COO - Al Rajhi Bank

4 2010-2013 CFO - Al Rajhi Bank

4. Current membership in the Boards of Directors of other joint-stock companies (listed &

unlisted) or any other company, in any legal form, or its committees:

No. Company Name

Activity Membership Status

Membership Nature

Committees Membership

Company’s Legal Entity 1

^{Al Rajhi}

Company for Cooperative

Insurance (ART)

Insurance Non-Executive Representative of Legal Person

Executive Committee

Listed Joint- Stock

2

Emkan Finance Company

Finance Non-Executive In his Personal Capacity

Closed Joint- Stock

3

Global Digital Solutions Company (NeoLeap)

Financial Services

Non-Executive In his Personal Capacity

Closed Joint- Stock

4

^Human

Resources Management

&

Development Company (Tanfeeth)

Recruitment Non-Executive In his Personal Capacity

Limited Liability

5

Ejada Systems Limited Company

Technology Non-Executive In his Personal Capacity

Limited Liability

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Attachments regarding item # 13 to 19

limited examination report and the notification of the chairman of the board

to the shareholders about the business and contracts that the members

of the board have any direct or indirect interest in

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BACC Annual Report for the fiscal year ended 31 December 2022

During the fiscal year of 2022, Audit and Compliance Committee held

nine meetings to discuss and examine its annual plan matters in addition to other related topics.

The following table illustrates dates of BACC meetings and attendees’ information during 2022:

Attendees Number Date

Meeting Number Attendees

Number Date

Meeting Number

All members 28 July

Sixth All members

2 January First

All members 26

September Seventh

All members 30 January

Second

All members 20 October

Eighth All members

16 February Third

All members 29

December Ninth

All members 6 March

Fourth

All members 21 April

Fifth

Audit and Compliance Committee comprises five members including two Board members and three independent members as follows:

This report summarizes Audit and Compliance Committee works for the year ended 31 December 2022 including its significant activities and duties it performed and followed up in line with its Charter approved by the Bank’s General Assembly.

First: BACC Resolutions

During its meetings in 2022, BACC recommended to the Board to approve (54) resolutions; where execution of (44) resolutions is completed and execution of the remaining (10) resolutions is in progress.

BACC Members – Al Rajhi Bank KSA

Membership Name

Committee Chairman and Board member Abdulatif bin Ali Al Seif

Committee Member and Board member Raeed bin Abdullah Al Tamimi

Committee Member Dr. Abdullah bin Ali Al Muneef

Committee Member Farraj bin Mansour Abothenain

Committee Member

Walid bin Abdullah Tamairik

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Page 18 of 20 Second: Financial Statements

During its meetings, BACC discussed interim quarterly and annual consolidated financial statements of the Bank for 2022 including many topics related to the management and external auditors as follows:



Discussed the Bank’s quarterly consolidated financial statements with the external auditors and management.



Discussed the Bank’s annual consolidated financial statements as of 31/12/2022 with the external auditors and management.



Followed up results of Management Overlays in 2022 and related notes with the external auditors and management.



Followed up results of comprehensive accounting procedures performed by the Bank and its external consultant to acquire Ejada Company.



Followed up results of recovering VAT, which was paid by the Bank for customers against their first house, from Ministry of Municipal & Rural Affairs and Housing.



Reviewed the improvements made to the process of calculating expected credit losses in 2022 for retail & non-retail sectors.



Followed up results of ARB dues at ZATCA against the VAT amounts related to financed properties and paid by the Bank for the first house buyers



Followed up results of accounting process for Al Rajhi Company for Cooperative Insurance after increasing the Bank’s ownership share to 35%.

Third: External Auditors



Reviewed and discussed disclosure submitted by KPMG regarding many out-of-scope services related to quarterly and annual auditing for financial statements to verify that it has no impact on KPMG independency and to make sure that there is no violation to related laws and regulations.

Fourth: Internal Audit

BACC followed up results of Internal Audit Group activities and progress of the approved strategic and annual plan. Also, it discussed significant observations and corrective actions, and it approved many charters and policies related to Internal Audit Group activities as follows:



Discussed and approved Internal Audit Group plan and annual plan for 2022, initiatives, and performance KPIs including ARBK & ARBJ.



Discussed major results of Internal Audit Group activities for 2022 for different sectors of the Bank and international branches as well as Internal Audit Group reports and submitted related recommendations.



Followed up progress of closing observations and implementing recommendations of IA by the managements and international branches and submitted related recommendations.



Approved KPIs of the Chief Internal Auditor for 2022.



Ensured effectiveness and independency of Internal Audit and lack of constraints on its scope of work.



Discussed and approved Internal Audit Group plan and annual plan for 2023, initiatives, and performance KPIs including ARBK & ARBJ.



Reviewed Internal Audit Charter and recommended to the Board to approve the same.



Followed up level of human capital adequacy for Internal Audit Group in the Bank and its international

branches including recruiting qualified staff for vacancies in internal audit.

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

Reviewed Internal Control Committee approvals to change target dates of closing some observations as per submitted justifications.



Affirmed the importance of activating role and presence of Internal Audit Group in memberships of audit committees of the Bank’s subsidiaries.



Reviewed results of internal audit environment assessment reports for 2022 and presented a summary for such reports at the Board meeting and submitted related recommendations to the Board for approval.

Fifth: Compliance Group

BACC followed up results of Compliance Group activities and progress of its business plan for 2022 Also, it discussed significant observations, and approved many charters & policies related to Group activities as follows:



Reviewed Annual Report of Compliance for 2021 and recommended to the Board for approval.



Discussed and approved annual program and plan of Compliance and Anti-Financial Crimes for 2022.



Worked on raising level of compliance with laws and instructions issued by SAMA and competent regulators in KSA.



Continuous enrich of compliance culture in the Bank to avoid risks related to non-compliance, particularly regular risks, reputation risks, and financial penalties risks.



Reviewed procedures of transferring Anti-Fraud Department from Compliance Group to Risk group and recommended to updated Committee Charter to align with such change and transferring all functions of Anti-Fraud Dept. to Risk Committee.



Followed up and supported Compliance Group to ensure sufficient staff as per SAMA instructions and requirements of Compliance, AML and CTF departments, commercial concealment, anti-bribery, anti-corruption, and anti-fraud.



Followed up ARB’s performance of implementing Compliance Group plan regarding training, awareness, and efforts exerted by Compliance Group in cooperation with Al Rajhi Training Academy.



Followed up SAMA inspection visits to Compliance Group and provided full support to the Group including meeting all requirements of inspection team and following up closure of observations monitored by Inspection team and its status and closure target dates.



During its meetings, reviewed all SAMA and other regulators fines of 2022 and Compliance Group efforts to avoid such fines.



Discussed progress of existing projects to develop automated systems of Compliance & Financial Crimes Group and supported it with required budget.



Continuous discussion for Financial Crimes Dept., SAS performance evaluation, combating financial fraud efforts, and major whistleblowing cases.



Reviewed and Followed up cases of fraud and phishing engineering as well as technical incidents received from Compliance Group.



Reviewed annual report of customer protection and complaints of ARBK for 2020 and recommended to the Board for approval.



Reviewed updates on AML & CTF Policy of ARB and recommended to the Board for approval.



Reviewed significant results of Compliance Committee in ARB during 2022.



Reviewed updates on Compliance Committee Charter – ARBK and recommended to the Board for approval.



Discussed the amendments to whistleblowing submitted by the Chairman of the Board of Directors –

ARM related to reporting violations of ARBM Board members and approved the same.

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

Instructed Compliance Group to ask ARB business groups to urgently abide by SAMA instructions.



Issued a recommendation to accelerate execution of projects automation to raise level of ARB control systems efficiency.



Recommended to apply SAMA requirements of digital verification to avoid imposing fines on the Bank.

Sixth: Sharia Group



BACC reviewed results of Shariah auditing report for 2022 and progress level of Sharia Control Dept.

activities as per the approved plan for 2022. In addition, it discussed significant observations related to products and observation closure updates.



Reviewed targets of Shariah Audit Department for 2023.

Seventh: Other Business



Approved BACC plan for 2023 in line with approved charter of BACC.



Followed up updates on Employee Fund treatment process and requested direct coordination between PwC and Clever Chance to unify efforts and apply appropriate governance frameworks and submit their recommendations.



Followed up progress of implementing Related Party Automated System.



Reviewed strategic plan of ARB including related targets and indicators.



Reviewed model and process of assessing Expected Credit Losses (ECL) submitted by ARB Risk Group.



Reviewed a presentation presented by Risk Group related to impact of applying Basel IV on ARB business.

Eighth: Audit & Compliance Committee’s Opinion on Internal Control System for the Year ended 31/12/2022

In 2022, Al Rajhi Bank has exerted all possible efforts to ensure adequacy and effectiveness of internal control system in line with SAMA requirements. In addition, the activities executed in 2022, including review of internal control system adequacy, have resulted in providing reasonable assurances for adequacy of applicable internal control process along with providing an assurance that the systems and procedures required to identify, assess and handle the Bank’s high risks are in place and effectively applied.

Thus, the Committee found no significant weaknesses which affect internal control system adequacy.

According to the results of internal control system evaluation process, Al Rajhi Bank has sufficient and adequate internal control system being monitored continuously noting that no internal control system can provide absolute assurances.