Committees of Savola

Committees of Savola

1. Committee General Guidelines
1. Objectives of Committees
2. General Guidelines
3. Committee Membership
4. Committees’ Meetings
5. Committee Secretary
6. Reporting
7. Assessment of Committee’s Performance
8. Committee Charters

1) Committee General Guidelines

Savola Group has three Committees, and a Board of trustees to supervise the CSR activities including:

1. Audit Committee (AC).^[1]
2. Remuneration and Nomination Committee (RNC).^[2]
3. Investment Committee (IC).
4. Savola world Board of trustees (Corporate Social Responsibility).

The Board may form additional Committees if the majority of the Board members vote for this, including the optional Committees mentioned in the CG Regulations issued by the CMA or as may be required later.

a) Objectives of Committees

These Committees serve as auxiliaries to the Board in the process of administrative control and to study the topics related to the nature of its work in detail and recommend them to the Board to help it make sound decisions.

b) General Guidelines

• Committee formation shall be in compliance with the general procedures of the Board. The Committee shall inform the Board of its decisions and outcomes with full transparency. The Board shall regularly follow-up on the activities of the Committees. However, this does not relieve the Board of any responsibility it delegates to such Committees.
• The Board shall define the functions and responsibilities of each Committee, as well as the methods of holding its meetings, its activities, and its members’ rewards within the charters of these Committees.
• The charters of the Audit Committee and RNC shall be approved by the GA.
• Each Committee has the right to recommend to the Board the appropriate amendments to its charter for its approval except for the Audit Committee and RNC as any amendments on their charters requires GA approval.
• The Company shall notify the CMA within 5 business days of their appointment or in case of any changes to the Committees with the relevant details of its Board Committees,  including the names of the members and their membership types.
• In discharging their oversight role, each respective Committee is empowered to investigate any matter brought to its attention with full access to all books, records, facilities and personnel of the Company and has the power to appoint outside counsel, auditors or consultants, provided that the Company shall incur all required expenses. With exceptions of the Audit Committee, the Board shall have the power to set the compensation as stated in the Bylaws. The details of such compensations are defined in the compensation policies of the Board, Committees and Executive Management approved by the GA.

c) Committee Membership

1.  Committee members shall be appointed by Savola’s Board based on the recommendation of the remuneration and nomination Committee (RNC) for a period of three years starting and ending with Savola’s Board office tenure. The number of members of each Committee shall not be less than three or more than five. Committee members shall possess the experience and qualifications related to each respective Committee function and mandate. Savola Board has the right to dismiss all or any of the Committee members at any time as it deems appropriate for the achievement of the Committee’s objectives except for the members of the Audit Committee whose appointment and dismissal is determined by the GA.
2. Any Committee whose duties are likely to produce situations involving a conflict of interest shall be comprised of a sufficient number of non-executive directors.^[3]
3. Each Committee has the right to form a team from within itself for any reason it deems appropriate to achieve its goals, and it has the right to delegate to the team some of its authorities as deemed necessary provided that such a team is comprised of not less than two (2) members.
4. The Chairman of each respective Committee shall be appointed by Savola’s Board or, if no such designation is made, shall be selected by the majority vote of the Committee.
5. Each Committee member is entitled to resign provided that the timing of the member’s resignation is appropriate and accepted by the Board.
6. In the event of vacancy in any Committee, the Board – upon the recommendation of the RNC – shall appoint a member in the vacant position to complete the period of his predecessor until the end of the tenure. As for the Audit Committee, the decision of appointment shall be presented to the nearest GA for approval.

d) Committees’ Meetings

Each Committee shall hold three to four prescheduled meetings during the year, and extraordinary meetings may be held as and when required.

e) Committee Secretary

Each Committee shall select its secretary, from among its members or the Company’s employees, without having the right to vote on the Committee decisions (in case the secretary is not a Committee member) and  shall be responsible for organizing the Committee meetings and activities, developing and documenting their minutes, following up on the implementation of their recommendations, directions and decisions, facilitating the communication process between their members, and providing administrative and logistical support. Each Committee shall set the remuneration and payment method of its respective secretary according to the relative Savola policies.

f) Reporting

The Chairman of each respective Committee shall provide periodic report to Savola’s Board about the performance and main achievements of the Committee. Each respective Committee shall prepare and publish an annual Committee report to the extent required under applicable laws and regulations. Each respective Committee shall report regularly to the Board on its activities and major decisions and recommendations. The report to the Board may take the form of an oral or written report by the Chairman or any other member of the Committee designated by the Committee to make such a report.

g) Assessment of Committee’s Performance

1. Each Committee shall perform an evaluation of its performance according to its respective charter under the supervision of the RNC, and for that, the Committee considers whether it dealt with issues that are within, or should be within its scope of work. The Committee should deal with all issues relevant to its specialization, and these issues include the following:
   • The quality and comprehensiveness of information obtained by the Committee.
   • The reports and recommendations the Committee gives to the Board
   • The way the information has been discussed, and whether the number and the length of the Committee's meetings were enough to accomplish required work in a comprehensive and well planned manner.
   • Attendance and absence of members.
2. Every Committee provides a report to the Board that includes the evaluation results, including any suggested modifications.

h) Committee Charters

Each Committee has its own charter, which includes its duties, responsibilities, follow-up mechanisms, and the reward methods, and shall not be amended except with the approval of the Board for the Investment Committee and upon the approval of GA for the Audit Committee and RNC.

[1] The Audit Committee charter has been approved by the Ordinary General Assembly on July 26, 2016, in accordance with the requirements of the Companies Law, as amended in compliance with the CGR issued by the CMA during February 2017. The amended regulation was approved by the Ordinary GA meeting held on 2/11/2017 and published in Tadawul’s website and Company's website

[2] The RNC Committee charter was approved by the Ordinary GA meeting held on 2/11/2017 and published in  Tadawul’s website and the Company's website.

[3] At its meeting held on 16-17 December, 2017, the Board approved the charter of the Investment Committee as part of the Company's internal CG framework.