SAVOLA GROUP COMPANY Contents
Overview
Strategic Review
04 | At a Glance | 16 | Chairman's Statement |
06 | Strategic and Financial Highlights | 18 | Board of Directors and Member Classification |
08 | Year in Review | 20 | Group CEO's Message |
11 | Turning Challenges into Opportunities | 22 | Executive Management |
12 | Investment Case | 24 | Our Strategy and Business Model |
26 | Our Journey | ||
28 | Food Investments | ||
38 | Retail Investments | ||
46 | Our People | ||
52 | CSR and Sustainability |
Directors' Report
62
Main Activities and Financial Disclosures
78 Corporate Governance Report and Major Relevant Disclosures
111 Savola Group Audit Committee Report
1
Overview
04 At a Glance
06 Strategic and Financial Highlights
08 Year in Review
11 Turning Challenges into Opportunities
12 Investment Case
2 The Savola Group Annual Report 2020
Total Assets Increase
In 2020, our total assets increased by 1.5% to SAR 27 billion.
1.5%
Forbes Top 100
Ranked 14th in Saudi Arabia, and 39th in Middle East in Forbes' list of 'Top 100 Companies in the Middle East 2020'
14
Best Workplaces
Ranked 17th in this year's ranking of Saudi Arabia's Best Workplaces.
17
Our Campaign Against COVID-19
We launched a national campaign to help reduce the impact of the virus on the people of the Kingdom
Our Food Investments 43% of Group Revenue
43%
Our Retail Investments 57% of Group Revenue
57%
Our Investment Proposition
With over 40 years track record of business growth, we offer a unique investment proposition and a diversified portfolio of popular consumer brands in the food and retail sectors.
At a Glance
A Leader in Food and Retail
Savola is one of the leading strategic investment holding companies in the MENA (Middle East and North Africa) Region, with a portfolio of leading brands in the food and retail sectors.
Major / Manufacturing MarketsExport Markets
Saudi Arabia
Egypt Algeria Sudan Morocco UAE Others
United Kingdom USA
Angola
Bahrain Benin Burundi Cameron Canada Comoros Congo Djibouti Eritrea
Yemen OthersEthiopia France Germany Ghana Jordan Kazakhstan Kenya Kuwait Lebanon LiberiaLibya Madagascar Malawi Mali Mauritania Mauritius Morocco Mozambique Netherlands North MacedoniaOman Pakistan Palestine Rwanda Senegal Sierra Leone Somalia South Africa South Korea South SudanSpain Sudan Sweden Syria Tanzania Uganda
Since 1979, Savola has built a reputation for creating "Value Built on Values" through our diverse and expanding portfolio of investments in leading food and retail companies.
Investors across the Kingdom and around the world trust Savola for our strong performance, specialist market knowledge and commitment to sustainability impact through our standalone Savola World Foundation.
We operate the largest grocery store chain in Saudi Arabia, and produce much-loved everyday household products, including edible oil, sugar, pasta, bakery products and frozen foods, for our valued customers in over 50 countries worldwide.
Our Food Investments
Our food vertical is made up of a portfolio of investments in large, branded categories across the MENA region. Savola Foods is a leader in basic branded consumer packaged goods, which are produced in more than 8 countries and exported to over 50 markets. We are proud to say that many of our products are market leaders in their respective categories. Through our commitment to strategic growth, we continue to innovate in our markets, build on our range of established products and diversify into higher-value items.
Our long-term strategic investments in the food sector also generate profits for our shareholders. We are the largest shareholder (34.52%) in the leading regional food manufacturer and distributor, Almarai Company, and own a 51% majority stake in Al Kabeer Group of Companies, one of the region's leaders in frozen foods manufacturing and distribution.
Ownership of Savola FoodsOwnership ofOwnership of
Almarai
Al Kabeer
Company
100%
34.52%
51%
Our Retail Investments
Our retail vertical is headed by Panda Retail, the largest modern grocery chain in Saudi Arabia with a total of 205 stores (including 4 stores in Egypt), serving more than 100 million customers annually. Panda boasts a proud history, a leading market share and formidable geographic reach.
Our long-term strategic investment in the retail sector consists of a 49% shareholding in Herfy Food Services Company. As such, we remain the largest shareholder in Herfy, one of the leading restaurant, industrial bakery and meat processing businesses in Saudi Arabia.
Ownership of Panda RetailOwnership of
Herfy
98.87%
49%
5
Strategic and Financial Highlights
Positive Performance and Profitability
Through the sound execution of our corporate strategy and dedication of our entire workforce during this historically challenging year, we succeeded in continuing the positive growth trends established in the previous year with regards to both the top and bottom lines.
Sales revenue for Savola rose 1.4%, from SAR 21.4 billion in 2019 to reach SAR 21.7 billion this year. This growth was the result of strong contributions mainly from our retail investments. 2020 witnessed Panda Retail's revenue increasing by 9%, Savola Foods Company's revenue decreasing by 6% and Al Kabeer Group's revenue increasing by 18.8%.
With positive revenue and profitability across most of our businesses, we are now in a solid position to invest capital into new categories within Food and Retail to complement our current portfolio. We have also established a venture capital program to actively explore acquisitions in disruptive companies and technologies to fuel future non-organic growth related to our core sectors.
In the year ahead, we will remain agile and focused, responding to evolving market dynamics while seeking to accelerate the positive momentum and stimulate further growth to create sustainable value for our shareholders.
Savola's full-year net profit rose to SAR 910.8 million on higher gross profit of SAR 4.6 billion due to increased sales and margins, compared to last year's net profit of SAR 476 million and gross profit of SAR 4.5 billion. This is equivalent to earnings per share of SAR 1.71 compared to SAR 0.89 in 2019.
Savola built on a year of resilience and recovery in 2019 to deliver a robust financial performance across our portfolio of leading food and retail companies in 2020. Despite the widespread social and economic restrictions of the COVID-19 pandemic across the Kingdom and our geographic footprint, Savola achieved revenue growth and a significant increase in profitability, driven by the return to profitability of Panda, enhanced quality of earnings for Savola Foods Company, higher profits in Al Kabeer and continued cost efficiency and optimization across our business.
Gross Profit SAR million
4,640
3%
4,653
4,504
4,640
4,394
Total Assets SAR million
27,058
1.5%
3,898
25,287
23,337
22,252
26,658
27,058
Revenue SAR million
21,702
Net Profit SAR million
911
Shareholders' Equity SAR million
8,232
Capital Expenditure SAR million
463
1.4%
26,331
21,702
23,830
91.5%
1,026
21,815
21,406
2016
2017
2018
-520 394
2019
8.5%
24.1%
8,829
1,265
8,217
8,232
7,590
7,127
2020
2016
673
2017 2018
463
374
7
Strategic Milestones in 2020
10 JANUARY
Launch of Savola World Foundation
Savola transformed our flagship CSR program Savola World, from a department into a standalone private foundation, called Savola World Foundation. The new non-profit organization will extend the Group's Sustainability and CSR programs, under the supervision of the Ministry of Human Resources and Social Development.
1 MARCH
'One Family' event raises awareness and support for productive families in the community
In line with the Kingdom's 2030 Vision and the Company's active social engagement strategy, Savola sponsored and supported Saudi productive families through a special community event at Savola Tower. The 3 day event held under the slogan 'One Family', brought together Savola employees with productive families from the community, offering them a great platform to sell their homemade products and interact directly with customers in a lively and positive environment.
7 APRIL
Savola among 'Best Workplaces in Saudi Arabia' for 2020
A testament to our commitment to creating a positive, diverse and engaging workplace for all our employees, Savola was ranked 17th in this year's ranking of Saudi Arabia's Best Workplaces, published by leading global workplace culture authority Great Place to Work® Middle East.
2020 was a notable and eventful year for Savola. It was characterized by the achievement of a wide range of strategic, financial and operational milestones, whilst also acting decisively to safeguard our people from COVID-19 and support our diverse stakeholders across the Kingdom.
12 APRIL
Panda enters eCommerce space with PandaClick
PandaClick, a new ecommerce platform for grocery purchases and deliveries from Panda, was launched to provide customers across the Kingdom with a quick and convenient way to shop for their favorite brands with just a few clicks, at home or on the move.
19 APRIL
'Our commitment is our duty' campaign against COVID-19
As part of our multi-faceted pledge to protect and serve our community, Savola launched the widespread 'Our commitment is our duty' national campaign. The successful campaign engaged hundreds of thousands of individuals across a wide range of social platforms, to help reduce the impact of COVID-19 on the people of the Kingdom.
16 JUNE
Forbes names Savola in 'Top 100 Companies in Middle East 2020'
A leading business and financial publication, Forbes Middle East Magazine, ranked Savola 14th in Saudi Arabia and 39th in the Middle East based on market value, sales, assets and profits in its annual list of Top 100 companies in the region.
13 SEPTEMBER
Savola buys back SAR 16.5 million worth of shares
As part of the Company's efforts to attract and retain key talent and to motivate staff to strengthen their performance, Savola bought back 341,675 of its shares for more than SAR 16.5 million (USD 4.4 million).
The transaction forms the first tranche of the Company's long-term incentive program (LTIP) for its employees. It has also reallocated shares to eligible employees, according to the program's approved policy and standards.
28 OCTOBER
New CEO appointed
Mr. Waleed Khalid Fatani was named Savola's new Chief Executive Officer, effective 1 January 2021, following the resignation of Eng. Anees Ahmed Moumina. Savola's Board of Directors extended its sincere thanks and appreciation to Eng. Anees Ahmed Moumina for his commitment, dedication and hard work exerted during his office term, which ended on 31 December 2020. The Board of Directors welcomes Mr. Waleed Khalid Fatani and wishes him good luck in his new role.
DECEMBER
Establishment of Savola Venture Capital Program
Savola launched a new investment program to co-invest in disruptive technologies in the food and retail technology spaces with best-in-class investment partners. It seeks smart acquisitions that serve this purpose to achieve inorganic growth in order to support its core business activities. As a part of this program, Savola aims to capitalize on rapidly changing consumer trends regionally and globally over the coming 3 to 5 years.
9
Safeguarding Savola and Our Stakeholders Against COVID-19
2020 was a year like no other. The COVID-19 pandemic had an immediate and transformational impact across our local and international markets, putting the physical and mental health, as well as the social and economic welfare, of our employees, customers, suppliers, partners and communities under pressure.
Savola responded with immediate, large-scale and well-coordinated action. We leveraged our resources and capabilities - our financial muscle, our government and corporate relationships, our central role in complex and dynamic food and retail supply chains, and our position at the heart of the many communities we serve - to protect and work for the health, security and best interests of our stakeholders.
For our employees | For our customers | For our suppliers | For our communities | For our shareholders |
|
|
|
Turning Challenges into Opportunities
Savola was resilient in adapting to the challenging economic and operational landscape during 2020, leveraging our strengths to maintain our strategic focus and support and sustain our diverse stakeholder ecosystems throughout the year.
Health
We prioritized the physical health and mental wellbeing of our 24,000+ employees through a wide range of actions and investments, raising awareness and ensuring alignment with all government regulations and requirements, whilst empowering them to ensure that our Group and operating companies would remain operational and capable of fulfilling our promises to our customers, community and nation.
Profit and growth
We did not stop investing in our turnaround or the strategy that will shape the future of our Group, delivering solid returns for our shareholders while launching a venture capital program for disruptive investments in food and retail to continue to enhance our portfolio and unlock avenues for future growth.
Digital transformation
We took immediate action to engage and support our customers, accelerating our digital transformation and automation, bolstering our logistics and distribution networks and launching Panda's new eCommerce platform.
Community Responsibility
We doubled down on our position at the heart of our communities and our critical food security role across our markets, ensuring supply of goods during the darkest days of the pandemic while reinforcing our long-term commitment to sustainable social impact by establishing Savola World Foundation.
A strong organization
The strength of our strategy and pride of our people were fundamental to the Company's capacity to overcome obstacles and continue to create value for our diverse stakeholder community. Bolstered by robust risk management and corporate governance at every level of the organization, Savola capitalized on the opportunities that arose in this challenging environment whilst establishing a solid foundation for sustained growth and profitability in the years ahead.
Investment Case A Unique Investment Proposition |
A REGIONAL LEADER IN FOOD AND RETAIL SAR 22 billion One of the largest food and retail players in the region with an annual turnover of over SAR 22 billion Forbes Top 100 Ranked 14th in Saudi Arabia and 39th in the Middle East in Forbes Middle East's annual list of Top 100 companies in the region #1 Staple food business #1 basic food business in MENA, Savola has market leading positions and brands across consumer staples and value-added ranges, such as edible oils, sugar, pasta and frozen food #1 Grocery retailer #1 grocery retailer in Saudi Arabia, Panda has strong brand equity and over 28% market share in the attractive and under-penetrated modern retail space of the GCC's largest market Largest shareholder Largest shareholder in 2 leading Saudi consumer brands, Almarai and Herfy, as well as popular frozen food brand, Al Kabeer |
CONSUMER UNDERSTANDING AND UNIQUE MENA FOOTPRINT
200+ stores
Dominant retail footprint with 200+ Panda and HyperPanda stores in 40+ cities across the Kingdom, with 100+ million annual transactions and the largest logistics network in Saudi Arabia
Serving 400+ million potential customers
Direct manufacturing and distribution strength in more than 8 countries, with 14 facilities serving a combined population of more than 400 million
Attractive exposure
Attractive exposure to large and growing population base with favorable demographics - more than 50% below the age of 35 years.
Extensive knowledge
Extensive consumer, market and brand knowledge, successfully leveraged to launch, grow and maintain market- leading positions and products (e.g. Afia, Al Osra, etc.)
Customer-centric
Continuous customer-centric innovation and product development based on deep consumer outreach to capitalize on strategic opportunities to launch and scale new businesses in the rapidly maturing and evolving consumer space in MENA and beyond
SUCCESSFUL TRACK RECORD OF DYNAMIC CAPITAL ALLOCATION
Unique investment model
Unique investment holding business model that allows for strategic investments and value creation in the MENA consumer food and retail space
Experienced leadership
Experienced leadership team with clear mandate to deploy and/or reallocate capital to enhance shareholder returns through investments in consumer segments with long-term growth potential
40+ years
40+ year track record of business growth, active capital reallocation and long-term investment horizon
Sustainable growth
Actively exploring multiple venues of investments in food and retail to help drive sustainable growth for the Group for years to come
Strategic Review
Gross Profit
Almarai
Savola Group's gross profit for 2020 stood at SAR 4.6 billion - 3% higher than 2019.
3%
Almarai preserved its leading market share across multiple segments, registering growth across dairy, bakery and poultry.
4,640
4,504
Al Kabeer
Al Kabeer capitalized on shifting market dynamics to grow revenues by 18.8% in 2020.
2019
2020
18.8%
Savola Foods Company
Panda Retail
Savola Foods Company's flagship El Maleka brand leads the packed pasta segment in Egypt, accounting for more than 40% of the market in 2020.
13% market share of total grocery retail in Saudi Arabia.
40%+
13%
Herfy Branches
Herfy is Saudi Arabia's leading fast food chain, with 388 branches across the Kingdom, and 12 franchise branches abroad (Kuwait and Bangladesh).
400
14 The Savola Group Annual Report 2020
16 Chairman's Statement
18 Board of Directors and Member Classification
20 Group CEO's Message
22 Executive Management
24 Our Strategy and Business Model
26 Our Journey
28 Food Investments
38 Retail Investments
46 Our People
52 CSR and Sustainability
Savola leveraged its considerable reach and strength in 2020 to contribute to supporting the community by ensuring the supply of essential goods for households across the nation throughout the COVID-19 crisis.
Chairman's Statement
We have remained true to our commitments to the people of the Kingdom, contributing to the Ministry of Health's efforts to combat the COVID-19 crisis and doing our part to ensure food security for the people and communities across Saudi Arabia.
Strengthening the Kingdom's Food Security
By converting the challenges of 2020 into opportunities, we have not only successfully navigated a complex environment but also charted a course toward continued growth and success.
A Leader in Corporate GovernanceEnhancing our Social ResponsibilityAcknowledgements
Savola remains at the forefront of our market in terms of corporate governance. This is exemplified by our commitment to enhancing corporate value by ensuring the Group fulfills its commitments to its shareholders, employees, communities and other stakeholders.
The central role of sustainability in our business, and our multiple initiatives to create a more socially and environmentally responsible company, testify to our commitments to building stronger, healthier communities and a cleaner natural environment.
On behalf of the Board of Directors, I would like to welcome our new CEO, Mr. Waleed Khalid Fatani, under whose fresh direction and leadership we aim to deliver great progress toward our strategic goals in the coming years. I would also like to thank our former CEO, Anees Moumina, for his leadership and dedication to our collective success.
As a market leader in food and retail, Savola has leveraged its considerable supply chain strength to support the government, the nation and its people by ensuring the supply of essential consumer goods throughout the global COVID-19 pandemic. True to our robust strategy, we have also succeeded in turning the challenges of the year into opportunities for growth and development, benefitting our investors with higher returns while also serving our many customers and communities more effectively.
In the face of the extensive disruption caused by the COVID-19 pandemic in 2020, we have safeguarded both our people and our profitability by proactively adapting to the current situation whilst also maintaining the essence of our robust and coherent strategy.
We have remained true to our commitments to the people, contributing to the Ministry of Health's efforts to combat the COVID-19 crisis and doing our part to ensure food security for the people and communities.
Our considerable presence in the food and retail spaces has empowered us to work closely with our full ecosystem of suppliers and partners to play a critical role in the continued supply of essential goods, despite the difficult conditions imposed by the pandemic.
By adapting our services to meet this new reality, as well as implementing new technological solutions and maintaining robust supply lines, we are well positioned to continue to safeguard the Kingdom's food security as the nation maintains its ongoing stand against the pandemic.
By converting the challenges of 2020 into opportunities, we have not only successfully navigated a complex environment but also charted a course toward continued growth and success.
Investing in Disruptive Technologies
In 2020, Savola created a new investment program aimed at capitalizing on global consumer trends by co-investing in new, disruptive technologies in food and retail. This includes a new framework designed to ensure investments remain focused on key objectives related to shareholder value and returns while also enhancing the technological capabilities of the Group's operating subsidiaries.
The ultimate goals of the program are to better understand trends among the younger generations who will drive our business going forward; tilt our existing portfolios in a proactive manner; and allow us to position Savola at the leading edge of technology and innovation through the development of selected partnerships and smart acquisitions.
Our leadership in this field is enabled by our effective corporate governance framework, regular interactive communications with all stakeholders and the implementation of best practices. These efforts have received national recognition; Savola has been ranked among the top 10 non-financial sector companies traded on the Saudi Stock Exchange, Tadawul, in the Corporate Governance Index (CGI) issued by the Corporate Governance Center at Al Faisal University.
Launching a long-term employee incentive program
In order to attract and retain exceptional talent, we have repurchased shares worth more than SAR 16.5 million (USD 4.4 million) during 2020. They will be kept as treasury shares within the framework of the first tranche of our long-term incentive program (LTIP). We have also allocated them to eligible employees, according to the approved policy and standards of the program, which we expect will continue to achieve the desired goal over the coming years.
In line with international developments in the field of corporate foundations, Savola formalized this mission by transforming its flagship CSR program, Savola World, into a standalone private foundation. The Savola World Foundation is a non-profit organization under the supervision of the Ministry of Human Resources and Social Development in Saudi Arabia; this status enables the Foundation to champion more effectively its sustainability and social development initiatives, including those which reflect the objectives of Saudi Arabia's Vision 2030.
Through the Foundation, we continue to deliver lasting change both for our people and for the wider communities among which we operate. As part of our COVID-19 response, we dedicated a total of SAR 10 million to initiatives during 2020, including through our support for the Kingdom's Health Endowment Fund. We also produced a series of awareness videos that went viral on a number of social media platforms, aimed at building collective public awareness with regard to measures to prevent the spread of the virus, and became one of the first organizations in Saudi Arabia to adopt the newly introduced Saudi National Sustainability Reporting Standards.
Our CSR activities also serve to increase our appeal among international investors. In line with the foreign direct investment goals outlined in Saudi Vision 2030, Savola was one of the Saudi companies added to the MSCI Emerging Markets Index in 2019.
I wish to convey the Board's appreciation to the Saudi government, our shareholders and our stakeholders for their continued support and trust in Savola. I would also like to thank our hard-working employees across our extensive footprint and our dedicated Executive Management in Saudi Arabia and abroad for delivering exceptional performance throughout 2020 and for playing a critical role in keeping us on track to realize our strategic goals in the face of the challenges presented by the pandemic.
As we look to 2021 and beyond, Savola will remain focused on securing increasing value for our people, communities, investors and other stakeholders; whilst also capturing the benefits of innovative technologies to power our growth and success.
Sulaiman A. Al Muhaidib Chairman
Board of Directors and Member Classification
Mr. Sulaiman A. Al Muhaidib
Mr. Bader Abdullah Al Issa
Mr. Essam Abdulkadir Al Muhaidib
Mr. Mohammed Ibrahim Al Issa
Mr. Bader Hamad Al Rabiah
Mr. Fahad Abdullah Al Kassim
Current positions: Chairman of the Board of Abdulkadir Al Muhaidib & Sons, and Board Member of Almarai, Rafal Real Estate, Al Muhaidib Holding, ACWA Power Vision Invest, and many other companies.
Previous positions: Chairman of the Board of Middle East Paper Co. (MEPCO), Al Oula for Real Estate Development, Thabat Construction and Amwal Khaleej Commercial Investment.
Qualifications: Second Class, Faculty of Medicine, King Saud University, Saudi Arabia
Experience: Business, industrial and banking management, as well as investment management and real estate development and contracting. He also sits on a number of other Boards and Committees.
Mr. Abdulaziz Khaled Al Ghufaily
Current positions: CEO of Assila Investments, Chairman of Savola Foods Company, Managing Director of Almarai, and Board Member of several companies.
Previous positions: CFO of Assila Investments, CEO of Amias Holding, Investment Portfolio Manager at HSBC Saudi Arabia Limited, Financial & Marketing Analyst at SABIC America, and Financial Analyst at JP Morgan.
Qualifications: Master's degree of Business Administration, Rice University, USA
Bachelor's degree of Economics, University of Virginia, USA
Certified Financial Analyst (CFA)
Experience: Financial and administrative fields, portfolio management, studying and analyzing of listed companies. He also sits on a number of other Boards and Committees of listed and private companies.
Dr. Adnan Abdulfattah Soufi
Current positions: Managing Director of Al Muhaidib & Sons, and Board Member of several companies.
Previous positions: A number of managerial positions, leadership roles and Board memberships in Al Muhaidib Group of Companies.
Qualifications: Bachelor's degree of Science in Statistics, King Saud University, Saudi Arabia
Experience: Managing a number of companies in the food and contracting fields. He also sits on a number of other Boards.
Eng. Mutaz Qusai Alazawi
Current positions: CFO of Assila Investments, and Board Member of Kinan International Real Estate Development.
Previous positions: Head of Balance Sheet Management and Investment at Saudi British Bank (SABB). He also served as a Member of the Board of Directors of Sukoon Real Estate Company and Al Aqeeq Real Estate Company.
Qualifications: Bachelor's degree of Commerce, Finance, Sauder School of Business, University of British Columbia, Canada
Experience: Financial management, investments and financial markets.
Mr. Abdulrahman Mohammed Ramzi Addas
Current positions: Vice-Chairman and CEO of Noor Al Salhiya Real Estate, Board and Audit Committee Member of Mezzan Bank, Member of the Board and Audit Committee and Chairman of the Risk Management Committee of Noor Financial Investment, Vice-Chairman and CEO of Al Manar Finance and Leasing Company, and Member of the Board and Executive Committee of Nakheel Agricultural Production Company.
Previous positions: Supervisor of Real Estate Financing at Kuwait Finance House, and Head of Real Estate Investment at Noor Financial Investment Company.
Qualifications: Bachelor's degree of Accounting, Kuwait University
Member of Kuwait Association of Accountants and Auditors
Member of Kuwait Economic Society
Experience: Business management, financial auditing, risk management and real estate investment.
Mr. Rakan Abdulaziz Al Fadl
Current positions: Retired - Public sector and Board Member of various of companies.
Previous positions: General Director of Local Shares Dept., Director of Hassana Investment, Direct Investments Dept. of General Organization for Social Insurance (GOSI).
Qualifications: Master's degree of Economics, Western Illinois University, USA
Bachelor's degree of Economics, King Saud University, Saudi Arabia
Experience: Social insurance, investment portfolios and shares. He also sits on a number of other Boards and Committees.
Current positions: Founder and Managing Partner of DAS Partners, Board Member of NCB Capital, Vice-Chairman of SISCO Group, and Chairman of the Advisory Committee of the General Authority for Awqaf.
Previous positions: Member of the Board of Commissioners of the Capital Market Authority (CMA) by Royal Decree appointment, Chairman of the Advisory Committee of the CMA Board, CEO of SEDCO Holding, Dean of the Faculty of Economics and Administration and Professor of Business Administration and International Finance at King Abdulaziz University (KAU), and Senior Associate Member of Oxford University's St. Antony's College.
Qualifications: Fulbright Scholar
Ph.D. in Business Administration and International Finance, George Washington University, USA
Experience: Executive strategist leader specialized in corporate governance, as well as business development, institutional investment and leading transformation.
Current positions: Managing Director of his Group of Companies, Vice-Chairman of Riyadh Bank, Chairman of Qatrana Cement, and Board Member of Mobily, Arabian Cement, Herfy Foods, SICEP, ST&T, and Wusataa.
Previous positions: Running his group of companies, and Director at Merrill Lynch, KSA.
Qualifications: Bachelor's degree of Computer Engineering, King Saud University, Saudi Arabia
Experience: Investment, trade, financial markets, construction management, banking and mergers and acquisitions. He also sits on a number of other Boards and Committees.
Current positions: Chairman of Savola World Board of Trustees and Member of Savola Group Remuneration and Nomination Committee, Member of the Board, Executive Committee and Audit Committee of Alinma Bank, Chairman of Diyar Al Khayyal Real Estate Development, Chairman and Risk Management Committee Member of Tunisian Saudi Bank, Board Member of Al Rabie Saudi Food, Board Member and Chairman of the Investment Committee at Environment Fund, Member of Risk Committee at Saudi Ground Services, Member of the Risk and Compliance Committee of General Authority for Zakat and Tax, Member of the Investment and Loans Committees at Agriculture Development Fund.
Previous positions: Several senior executive positions at National Commercial Bank, and Managing Director for Real Estate Group in charge of Real Estate investments and Member of the Executive and Strategic Committees at SEDCO.
Qualifications: Master's degree of Business Administration from the University of Denver, USA with a major in Finance
Bachelor's degree in Business Administration, King Abdulaziz University, Saudia Arabia with First Degree Honors
Experience: Banking, risk management, strategic management and investment.
Current positions: Founder and Director of London Realty Limited, Executive Director and Board Member at Al Fadl Group, Board Member, President and CEO of Sahara Building Contractors, Board Member and Executive Committee Member at Rabya, Board Member and Investment Committee Member at Al Fadl Investments, Board Member and Investment Committee Member at Al Fadl Real Estate, and Board Member and Investment Committee Member at Al Takamul Group.
Previous positions: Running his Group of Companies.
Qualifications: Bachelor's degree in Finance and Economics, Babson College, USA
Experience: Several managerial and leadership positions and Board memberships in Al Fadl Group of Companies. He also sits on a number of other Boards and Committees.
Current positions: Chairman of Amwal Financial, and Executive Board Member of Al Rajhi United Investment.
Previous positions: CEO of Amwal Financial Consultants, General Manager of Al Othaim Trading Group, Managing Partner at KPMG International, and Executive Director at Dallah Hospital.
Qualifications: Bachelor's degree of Science in Management with a major in Accounting, King Saud University, Saudi Arabia.
Advanced Management and Leadership Program, Oxford University, UK
Experience: Financial, administrative and auditing consultancy, executive management in a health institution, executive management in retail and wholesale, and sits on other Boards and Committees.
Safeguarding Our People, Profitability and the Kingdom's Food Security
Group CEO's Message
Savola has not only stood firm in the face of this adversity, but succeeded in achieving remarkable results.
Savola has succeeded in transforming adversity into opportunity during this challenging year, delivering a variety of initiatives that have served to secure our continued growth and performance. Led by the insights of our experienced Board and astute Executive Management and powered by our dedicated colleagues, Savola made strong efforts to overcome the challenges presented by the pandemic and almost doubled its profitability for the year compared to the previous year. We have maintained our positive momentum from the previous year while launching a venture capital program to drive further sustainable growth and to augment our operating companies in 2021.
I am proud to have recently joined Savola as the Chief Executive Officer and I appreciate the opportunity to work alongside such an inspiring team to achieve further outstanding results for our shareholders in the years to come.
In what has been a highly challenging period for people and businesses all over the world as they have sought to contain the impacts of the global COVID-19 pandemic, Savola has not only stood firm in the face of this adversity but succeeded in achieving remarkable results.
Thanks to our resilience, both in terms of our operations and the outstanding commitment of our people, we have met the challenge head-on, adapting to the new reality through innovation, while maintaining the focus on our strategic goals. In this way, Savola has succeeded in creating opportunities in the midst of current challenges, capitalizing on e-commerce channels to serve its customers more effectively during the measures to contain the virus.
Given the potential implications of the pandemic for the nation, Savola was highly conscious of its role as a pillar of the Kingdom's food security. With the onset of the pandemic, a notable rise in volumes was evident as people began stockpiling essential items.
The Group therefore began coordinating closely with government agencies to ensure the integrity of the supply chain and the continued movement of goods to satisfy demand in the face of shortages.
Throughout the crisis, we have remained fully aware of our responsibilities to protect the health and wellbeing of our people and our customers across our entire operating footprint. With the onset of the pandemic, we immediately moved to ensure all our premises were made safe, in coordination and cooperation with the relevant authorities.
Those employees who were able to fulfil their roles remotely began working from home to reduce the risk of contracting or transmitting the virus, with high-risk individuals being prioritized. We also implemented state-of-the art monitoring, powered by leading technologies, to preserve workplace and customer safety, sharing our experiences and best practices to benefit other companies and organizations to assist in limiting the spread of the virus.
Savola achieved revenue of SAR 21.7 billion in 2020, representing an increase of 1.4% over 2019.
SAR billion
21.7
Strong Performance and Increased Profitability
Savola achieved revenue of SAR 21.7 billion in 2020, representing an increase of 1.4% over 2019. Our gross profit for 2020 was SAR 4.64 billion - 3% higher than in 2019 - while EBITDA grew by 10.8% to reach SAR 2.78 billion.
Savola Foods Company (SFC) generated SAR 8.64 billion in revenue and achieved 3.1 million metric tons in sales volumes during the year. Meanwhile Panda Retail, which remains the largest modern retailer in Saudi Arabia, delivered SAR 11.6 billion in revenue.
Frozen foods player, Al Kabeer Group of Companies, in which Savola holds a 51% shareholding, posted revenue of SAR 737 million. For the year, Almarai - 34.52% of which is owned by Savola - generated revenue of SAR 15.36 billion, and Herfy, in which the Group maintains a 49% share, delivered revenue of SAR 1.07 billion.
Securing Growth and Development in 2020
Savola continues to be a leader in our home market of Saudi Arabia and plays a key role in many of our other markets. Given this strategic position in the food and retail sectors of the MENA region, Forbes Middle East Magazine ranked Savola 14th in the Kingdom and 39th in the region in its 'Top 100 companies in the Middle East for 2020'.
Our focus in 2020 remained concentrated on the goal of supporting and growing our operating companies in the food and retail spaces. Given the demands of the COVID-19 crisis, we concentrated our efforts on our new e-commerce platform, as well as on factory modernization and our disruptive food and retail technology investment programs.
Food Investments
Thanks to our efforts to optimize expenses, we have secured an increase in profit over 2019. In 2020, the higher value-added products in our portfolio allowed us to achieve higher margins and profitability. We have also secured more cost-effective practices among our operating companies in 2020, having established a program to identify and implement potential synergies across the Group.
In response to the COVID-19 crisis, SFC restructured production lines, whilst also making sure our supply chain was robust and open so factories could continue to work and meet demands. Our expense rationalization program also continued to achieve results, reducing costs and generating efficiencies.
We also worked closely with the team at Al Kabeer, achieving solid growth and performance, and capitalizing on a changing market dynamic driven by more at-home cooking by expanding our product range. Almarai, too, saw notable growth and a range of product launches, despite the prevailing conditions.
Retail Investments
Despite the turmoil experienced throughout the year, 2020 saw the continued turnaround of our Panda retail business with a return to full-year profitability, which benefited positively from the COVID-19 impact.
Having quickly identified the changing needs of our customers and our market in response to the COVID-19 pandemic, we accelerated the launch of PandaClick, our new e-commerce platform for grocery purchases and deliveries from Panda.
2020 was a challenging year, in particular for Herfy, which saw lower sales compared to 2019 as a result of the direct and indirect effects. Nonetheless, the success of our 2 production facilities - meat and bread, helped to reduce the impact of the closure of dine-in restaurants and consumer preferences to eat/cook at home.
Our People, Culture and Values
Given the global threat posed by the pandemic, we placed significant emphasis on maintaining the health, safety and well-being of our employees in 2020. In particular, we focused on awareness and education; by ensuring clear messages were communicated to our people across the Group, we were able to both distribute preventative advice and maintain complete transparency regarding our response to the spread of COVID-19.
We recognize that our people are key to our success and worked throughout 2020 to develop and deploy a long-term incentive plan (LTIP) to provide additional methods of retaining key talent across Savola. The LTIP will be expanded in the coming years to cover an increasing number of roles.
In keeping with the goals of the nation and the Saudi Vision 2030, we are committed to Nationalization, with the proportion of Saudi employees in Savola reaching 37% of our total workforce in 2020, representing a 21% increase over 2019. We have also enhanced our succession planning for key positions across the organization during the year to ensure appropriate governance and contingencies with respect to the future of our business.
Delivering Continued Growth in 2021
We look forward to securing the continued growth of our core business in the coming year, capitalizing on the foundations laid in 2020, while also looking for potential new venues to ensure the sustainability of our growth trajectory.
To all of our employees, I thank you for your steadfast dedication and contributions to our success during this year. Likewise, to our supportive Board of Directors, experienced Executive Management team and all of our stakeholders, I am grateful for your resilience and ability to come together to transform a challenging year into one marked by opportunity and growth.
Waleed Khalid Fatani Group Chief Executive Officer
Executive Management
Mr. Waleed Khalid Fatani
Mr. Sameh M. Hassan
Dr. Bander T. Hamooh
Current position: Group CEO
Previous positions: CEO of Saudi Fransi Capital, Group Treasurer of Abdul Lateef Jamil and Capital Markets and Investment Advisor to the President, General Manager of Deutsche Bank Saudi Arabia, and various roles with Banque Saudi Fransi including Head of Group Treasury and a Member of several Executive Committees.
Qualifications: Bachelor's degree of Science in Accounting, California State University, USA
Experience: Over 26 years of banking, financial and investment experience, and experience across a variety of business and financial services sectors.
Eng. Anees Ahmed Moumina
Current position: CEO of Savola Foods Company
Previous positions: Chief Portfolio Officer of Al Faisaliah Group, CEO of Saudi Tadawi Healthcare, Chief Operating Officer of Basamh Trading and Industries Group, and Board Member of a number of other companies.
Qualifications: Bachelor's degree in Economics, American University, Cairo, Egypt
Experience: Leadership, planning and management of foods and industrial multinational companies and other diverse sectors.
Mr. Nouman Farrukh Muhammad Abdussalam
Current position: CEO of Panda Retail Company
Previous positions: CEO of Al Nahdi Medical Company, and General Supervisor of Public Affairs at the Ministry of Health.
Qualifications: Bachelor's degree in Pharmaceutical Science, King Saud University, Saudi Arabia
Experience: Over 30 years of experience in retail, pharmaceutical and food industries in both private and public sectors. He also serves as a Board Member of a number of companies.
Mr. Wajid Usman KhanMr. Elnour Ali Saad
Mr. Mohammad Nasr
Mr. Morhaf M. Alsamman
Current position: Executive Director, Corporate Governance, Compliance, Legal Affairs, and Board Secretary
Previous positions: Various senior positions in Savola Group including Executive Director of Corporate Governance, Compliance and Legal Affairs, Director of Corporate Governance and Board Affairs for Savola and its subsidiaries including Food Sector and Retail Sector, and Senior Manager of Corporates, Board Affairs and Communication.
Qualifications: Master's degree in Law (LLM), University of Cumbria, UK
Bachelor's degree and MBA, Sudan University of Science and Technology, Sudan
Certified Corporate Governance, Board and Committees Secretary
Experience: Over 18 years of experience in corporate governance, compliance, corporates, legal, Board of Directors' and Committees' affairs, investor relations and shareholders' matters, and corporate communication. He also has practical experience in CMA regulation, companies' law, drafting reports, and managing shareholders' meetings, preparing legal memorandums and following up cases before judicial bodies.
Current position: Executive Director, Investment
Previous positions: Various leadership positions in investment strategy and transactions across MENA, Europe, and Asia in private equity, mergers and acquisitions and consulting with leading global and regional companies such as Credit Suisse, Gulf Capital and Al Mal Capital (an investments subsidiary of Dubai Investments PJSC).
Qualifications: Master's degree in Business Administration, London Business School, UK
Bachelor's degree in Industrial and Manufacturing Systems Engineering, Lehigh University, USA
Experience: Over 20 years of experience in investment and operational strategy leadership, deal origination, restructuring, M&A, managing investment portfolios and exit plans across several sectors.
Internal Control, Audit, Risk, and Corporate Communications and Marketing Team:
Mr. Aly Assem Barakat
Mr. Yasser Hassan Dahlawi
Current position: Executive Director, Human Resources and Corporate Services
Previous positions: Head of Human Resources and Head of Talent Acquisition for Savola Group, and various positions in local and multinational companies, including Emaar Economic City, NCB and Cristal Global.
Qualifications: Certified Professional in Human Resources - Internationalism (PHRi) from the HR Certification Institute
Master's degree in Business Information Technology, DePaul University, USA
Experience: Over 13 years of experience in HR Management, mainly covering HR business partnership, staffing and recruitment, organization development, performance management, training and development, Saudization programs, and HR policies and procedures.
Mr. Amr Hamzah Almadani
Current positions: Former CEO, Savola Group (until 31 December 2020), Board Member of National Commercial Bank, Dr. Suliman Fakeeh Hospital Company, Herfy Company, Knowledge Economic City Company (KEC), Effat University and Savola World Foundation Board of Trustees.
Previous positions: CEO of Savola Group (until 31 December 2020), CEO of SEDCO Holding Group, General Manager and Senior Credit Officer of Samba Financial Group, and Proctor & Gamble, Vice-Chairman of Savola Foods Company, Vice-Chairman of Panda Retail Company, Vice-Chairman of United Sugar Company, Vice- Chairman of Afia International Company, Vice-Chairman of Variety Food Company (Al Kabeer), and Board Member of Almarai Company (all up to 31 December 2020).
Qualifications: Master of Science in Engineering Administration with Honors, The George Washington University, USA
Bachelor of Science in Civil Engineering with Honors, The George Washington University, USA
Experience: Over 35 years of experience in the private sector and the financial services industry with experience across a variety of business sectors, including investments, retail, manufacturing and real estate.
Current position: Former CFO, Savola Group (until 31 December 2020)
Previous positions: CFO of Savola Group (until 31 December 2020), CFO of Savola Foods Company, CFO of Attieh Group, CFO of Emaar The Economic City, Deputy Director Finance at Savola Group, Senior General Manager Finance and IT at Savola Foods, Finance Manager at Savola Bahrain, and Assistant Manager Cost and Budget of Pakistan-based cement manufacturer.
Qualifications: Professional qualifications in Cost and Management Accountancy and Taxation Management
Associate of the Institute of Cost and Management Accountants
Fellow of the Institute of Taxation Management
Bachelor's degree of Finance, Karachi University, Pakistan
Experience: Over 20 years of experience in financial management, financing and accounting with Savola Group and its subsidiaries.
Current position: Group Chief Financial Officer
Previous positions: CFO and Head of IT of Savola Foods Company, various other senior positions in Savola Group including Executive Director Group Finance and Treasury, Executive Director Corporate Finance, Finance Director and Assistant General Manager Finance, and Assurance and Business Advisory at PricewaterhouseCoopers (PwC) in Saudi Arabia and Pakistan.
Qualifications: Master's degree in Commerce, HEC, Pakistan
Professional qualifications in Chartered Accountancy
Fellow Member of the Institute of Chartered Accountants of Pakistan
Associate Member of the Institute of Chartered Accountants of England and Wales
Experience: Over 20 years of experience in financial management, corporate finance, strategy and digital transformation with Savola Group and its subsidiaries.
Current position: Group Chief Audit Officer
Previous positions: Senior Manager at Abu Dhabi Accountability Authority, Manager at KPMG, and Manager at Ernst & Young (EY).
Qualifications: Bachelor's degree in Commerce, University of Helwan (Major Accounting), Egypt
Licensed Certified Public Accountant, USA Chartered Global Management Accountant
Association of International and Professional Accountants
Experience: Over 25 years in the financial sector, internal and external audit, governance, risk management and compliance.
Current position: Executive Director, Risk Management
Previous positions: Head of Regulatory Compliance, Enterprise Risk Management at The National Commercial Bank (NCB), and Senior Advisor at KPMG Saudi Arabia.
Qualifications: Master's degree of Science, Engineering and Technology Management, Portland State University, USA
Bachelor's degree of Science, Industrial Engineering, King Fahad University of Petroleum and Minerals (KFUPM), Saudi Arabia
Experience: Around 10 years of experience in risk management, mainly covering enterprise risk management, risk reporting, Basel II/III, capital planning and allocation, and risk policies procedures.
Current position: Director, Corporate Communication and Marketing
Previous positions: Various marketing roles including Head of Shopper Marketing in Panda Retail Company, and marketing positions in Emaar the Economic City and Fakieh Tourism Group.
Qualifications: Master's degree in International Business, Hull University, UK
Bachelor's degree in Marketing, King Abdulaziz University, Saudi Arabia
Experience: Over 12 years of experience in marketing, brand management, media, digital media, communication, public relations and retail.
Our Strategy and Business Model
A Focused Model That Aims for Sustainable Growth
Savola is a strategic investment holding company with a thematic investment program focused on the food and retail sectors, with the aim of creating value by enabling and accelerating growth levers in the underlying portfolio to achieve scale and profitability.
OUR STRENGTHS
Strategic Focus
Savola focuses its operations on long-term consumer trend-driven lens, aiming to dynamically allocate capital to generate long-term value growth.
Strong Governance Framework
A robust governance and transparency framework, prioritized throughout Savola's history, building shareholder trust.
Infrastructure and Consumer Access
Through our holdings, we possess Saudi Arabia's largest distribution network, retail space and brand portfolio in the country's consumer space and touch millions of consumers across all of our markets.
OUR CHALLENGES
• Challenging macro-environment in operating countries, whereas a number of countries introduced economic reforms that may have a negative impact on the purchasing power of consumers
• Change in consumer behaviour, where consumer preferences and tastes may change in a more pronounced manner that may impact current products and business models
• Limited number of transactable assets from the perspective of an investment holding whose key directive is to allocate capital
• High relative valuation of food assets, in view of scarcity of sizeable assets that fit strategically with Savola Group's investment mandate, as well as other factors including the economic and business cycles and their impact on such assets
HOW WE ADD VALUE
Leadership and Governance Savola's focus as a strategic shareholder is to implement best practices across its portfolio to ensure:
Capital Allocation
- Alignment of incentives among stakeholders; and
- Selection of the right leaders and management teams to deliver on strategic and operational targets.
Savola aims to maximize return on investment by deploying or redeploying capital to enhance shareholder returns and create additional value by gaining access to segments with long-term potential within the consumer space. The primary objective is to generate sustainable excess returns over the cost of capital.
Setting Targets and Monitoring Performance
Savola is building the tools required for effective performance management across its portfolio. This includes both short-term and long-term operational and financial KPIs, with periodic reviews and a proactive approach that prioritizes the long-term best interest of the business.
Long-Term Strategic Planning Savola believes that in addition to managing our capital and operating companies for performance and long-term sustainability at the subsidiary level, our role is to look at our markets, our holdings and our operations with a view to realize our ambition of maximizing our share of consumer spend across our markets profitably over the long-term horizon.
Our Corporate Values
Our values underpin everything we do, they are a blueprint for concrete actions we take as individuals, as a team and as a company, every day. Since the Group was founded in 1979, this is how we do business:
PERSONAL VALUES
Tawado: Confident Humility; Having the confidence to perform our responsibilities while having the humility to minimize our ego
It'qan: Relentless pursuit of perfection; The ability, willingness, desire and intention to do our best to ensure that work is completed to the best standards
Azm: Fierce Resolve; Apply what we learn to improve ourselves
Iq'tida: Apprenticeship; To seek out, interact with, and learn from those who are more knowledgeable than us
GROUP VALUES
Ihsan Al-Dhan: Trusting; Trusting others intentions without doubting it
Mu'azarah: Caring; Provide support to our colleagues to help enable their success
Qabool: Acceptance; Endure the views of others by going beyond tolerance or acceptance
Iq'bal: Approaching; Improve what we do by using what we have learned from the interaction with others
CORPORATE VALUES
Taqwa: Conscientiousness; Fulfillment of our responsibility toward external parties
Amanah: Honesty; Is the fulfillment of our responsibilities towards investors
Mujahadah: Personal control; Achieving the personal discipline necessary to fulfill our responsibilities
Birr: Caring Justice; Fulfillments to our responsibility toward our colleagues and the employees of the Company
Our Journey
Four Decades of Growth and Diversification
1970s
1979
Savola is established, with a paid-up capital of SAR 40 million and 50 employees.
1980s
1981
Savola's edible oil refinery in Jeddah, the first in Saudi Arabia, begins operations.
1982
Launch of Afia premium corn oil. By the late 1980s, Savola captures 70% of the Saudi edible oil market.
1990s
1991
Acquisition of a 40% shareholding in Almarai.
1992
Savola becomes a publicly listed company on the Saudi Stock Exchange (Tadawul).
Savola Bahrain and Savola Egypt commence edible oil operations.
1993
Joint venture with Tate & Lyle to establish United Sugar Company, Saudi Arabia's first sugar refinery.
1995
Afia International Egypt is formed through the merger of Savola Egypt and SIME Derby Egypt.
Savola Foods establishes an edible oil factory in Egypt.
1998
Savola enters the retail sector, following its merger with Azizia Panda.
Savola gains a 70% stake in Herfy through the Panda merger.
2000s
2003
Savola Foods establishes edible oil businesses in Morocco and Sudan.
2004
Panda launches the Hyper Panda format.
2005
Savola establishes Kinan Real Estate, subsequently divesting 70% through private placement.
2006
Savola invests in King Abdullah Economic City (KAEC) and Knowledge Economic City as a founding shareholder.
2008
Panda acquires Giant Stores and opens its first central distribution center in Riyadh.
2009
Panda acquires Géant Stores operations and expands its network to 152 locations.
2010s
2010
Savola launches its first CSR program, 'Makeen', to train and empower people with disabilities.
Herfy is listed on the Saudi Stock Exchange (Tadawul) with Savola retaining 49% of its shares.
2011
Standard & Poor's, Hawkamah and the International Finance Corporation rank Savola 2nd among top-listed companies in the Arab world for governance and transparency.
Savola Foods enters the pasta market by acquiring El Maleka Company and El Farasha Company in Egypt.
2013
Savola's first Sukuk issuance (SAR 1.5 billion).
Savola acquires Al Muhaidib's shares in Panda (18.6%) and Savola Foods (10%) in exchange for the issue of 33.9 million new Savola shares through a capital increase to SAR 5.34 billion.
2010s
2015
Savola Foods enters the seafood business with global seafood leader, Thai Union, to launch the famous John West brand in 12 markets across the MENA region.
Savola Foods launches Afia Distribution Company in Saudi Arabia.
2016
Savola unveils a new brand identity, symbolizing its evolution to a strategic investment holding company.
Savola receives the Sa'afa Award from the Integrity and Transparency Foundation.
2017
Savola sells a 2% stake in Almarai, as a part of its capital re-allocation, whilst remaining the largest shareholder with a 34.52% stake.
Savola ranks top 10 for transparency in corporate governance, environment and social practices in MENA by S&P and Dow Jones indices and Hawkamah.
Savola launches its second CSR program, 'Negaderha'.
Negaderha
Savola Foods commissions a new factory in Jeddah to manufacture specialty fats for the B2B market.
Savola Foods establishes a joint venture in Iraq with Aves to create Bonus Food Company LLC, which is engaged in the refining and packaging of edible oils and vegetable ghee.
2018
Savola acquires a majority stake (51%) in Al Kabeer, one of the region's leading frozen foods companies.
2019
Savola issues the 2nd tranche of Sukuk, pursuant to a new program in an aggregate amount of SAR 1 billion.
Savola among the 31 companies added to MSCI (Morgan Stanley Capital International), as part Tadawul's inclusion into the MSCI Emerging Markets Index.
Standard & Poor's, Hawkamah and the International Finance Corporation rank Savola 4th among top-listed companies in the Arab world for governance and transparency.
2020
2020
Savola named among Top 20 Great Places To Work® in the Kingdom of Saudi Arabia.
Savola ranked top 10 among all non-financial sector companies traded on Tadawul in the Corporate Governance Index (CGI) by Al Faisal University's Corporate Governance Center.
Savola was among the 'Top 100 companies in the Middle East' for 2020 according to Forbes Middle East, ranked 14th in the Kingdom of Saudi Arabia and 39th in the Middle East.
Food Investments
Our portfolio of food brands are industry champions and market leaders in the key economies they operate in.
Revenue Breakdown (SAR million)
Savola Foods Company delivered a robust financial performance in 2020 with SAR 311 million in profits on SAR 8,644 million in net revenue.
2020 Sales Volume by Business Line (in million MT)
1.5
1.3
SAR million
311
0.3
Edible Oil
Sugar
5,709 | 2,329 | 537 | 737 | 15,357 | 69 |
Edible Oil and Fats | Sugar | Pasta | Frozen Foods | Almarai | Others |
Pasta
Savola Foods Company
Throughout 2020, Savola Foods Company (SFC) has remained steadfast and resilient in the face of the disruption caused by the pandemic. As a market leader in various segments in key economies throughout the MENA region, we solidified our role as a pillar of sustainability and endurance, ensuring a stable, reliable supply of essential items and products across our geographic footprint.
Savola Foods Company is a leading producer of staple products, includingedible oils, vegetable ghee, sugar, pasta, seafood, specialized shortening and fats, and baked goods, creating branded products from facilities in 8 countries for more than 50 markets around the globe. Our brands are well-known throughout the region and beyond, earning their place as trusted products in households and supermarket shelves across the MENA region.
Overall, SFC successfully turned the challenges of 2020 into opportunities, achieving a robust financial performance.
The business generated SAR 8.64 billion in net revenues and 3.1 million metric tons in gross sales volumes - including equity accounted joint ventures (JVs), while posting SAR 311 million in profits on improved quality of earnings through a focus on higher margin categories, and a strong performance in Saudi Arabia and Egypt. SFC therefore achieved a significant improvement in the quality of profitability compared to the previous year, despite the pandemic and the disruption caused by currency devaluations in certain foreign markets.
A Resilient Response
As a regional food industry champion, producing staple foods for homes throughout the Kingdom and beyond, our immediate priority in facing the COVID-19 crisis was to ensure food security and availability across our markets, while also assuring consumers of our high standards of quality and safety. We acted with purpose and speed to coordinate with all key stakeholders - from government and strategic partners to our people, customers and community - to build a shared understanding throughout this challenging period.
At end-2020, Savola Foods employed 6,549 people across its operations, of which 1,300 were based in Saudi Arabia, in addition to 4,186 indirect employees.
As one of our most valuable assets, we also sought to shield our employees from harm by implementing rigorous safety standards to allow them to continue operating, safe in the knowledge that their health and wellbeing were key priorities.
Despite the economic effects of the global health crisis, we remained committed to our role as a key national employer and engine of industrial development, supporting the national economy in facing the global shock initiated by the virus and delivering progress toward achieving the strategic objectives of Saudi Vision 2030.
By actively restructuring our production lines and providing additional support for imports and exports, whilst also making sure our supply chain was robust and fully operational, we strengthened our resilience and capacity to meet the significant demand.
As with companies and industries throughout the Saudi economy and around the world, the pandemic imposed a number of negative effects on our business. The success of our business-to-business (B2B) channel in 2020, for example, was undermined by a combination of factors, including the national lockdown and movement restrictions, which also impacted the hotel, restaurant and café (HORECA) industry. Furthermore, the limited travel and religious tourism in the Kingdom also undermined activity across these industries.
Conversely, however, our business-to-consumer (B2C) channel witnessed healthy growth during the course of the pandemic, and particularly in the first half of the year, owing to food stockpiling, and the sizeable increase of in-home dining preference due to health and movement restrictions.
Savola Foods Company
Delivering Healthy Performance
Throughout 2020, SFC continued to manufacture and distribute our brands to consumers across Saudi Arabia and around the world, defending our market share and focusing on creating value for our business and stakeholders.
Edible oils
A major product line for SFC, our edible oils business continued to thrive in 2020, continuing our strong market position in Saudi Arabia, Jordan, Sudan, Egypt, Lebanon, Algeria and Morocco.
Savola achieved a full-year value of SAR 5.7 billion in edible oil sales in 2020, from 1.5 million tons of production, of which 30,000 tons were exported, accounting for SAR 158 million. We account for 57.4% of the edible oils market in Saudi Arabia and 14.7% of the GCC market. Beyond the Gulf, Savola has an edible oils market share of 9% in Lebanon, 31% in Egypt, 26% in Sudan.
2020 saw the highly successful relaunch of Afia in Saudi Arabia, with a new bottle design and size, supported by a 360-degree marketing campaign.
We also launched Afia coconut oil in KSA, in response to global health trends and the evolving preference of consumers; expanded our olive oil range with the introduction of Zaytouni to the Saudi market to compete in the Value-For-Money (VFM) tier; and broadened our offering still further with the introduction of 4 flavor-infused Afia olive oils.
Sales
Value:
Sugar Oil Pasta
SAR 2.32 billion
SAR 8.64 billion
SAR 5.71 billionSAR 0.54 billion
Volume:
Total: 3.1 KMT
49% Edible Oil (1.5 KMT)42% Sugar (1.3 KMT)9% Pasta (0.3 KMT)
Exports
Value:
Sugar Oil Pasta
SAR 1,226 million
SAR 1.46 billion
SAR 158 millionSAR 80 million
Volume:
Sugar Oil Pasta
Total: 873 KMT
795 KMT
30 KMT
48 KMT
Factories
14 fully fledged manufacturing facilities
KSA | Edible oil, Sugar, Vegetable fats |
Egypt | Edible oil factory, Sugar and Pasta |
Morocco | Edible oil factory |
Algeria | Edible oil factory |
Sudan | Edible oil factory |
Other countries | Three edible oil factories and one bakery |
Market Share in SFC Markets for Major Product Categories
Edible Oil
Ghee
Pasta
Sugar
Sources:
1. Nielsen Retail Audit
9,512
677 648 451
1,979
247 261 337
2. Strategic Marketing Services of Savola Foods estimates and secondary sales data
We re-launched our Ganna brand of ghee in Egypt in 2020, introducing an upgraded flavor, accompanied by a digital and above-the-line marketing campaign for the brand and for our premium Rawaby vegetable ghee.
Sugar
An undisputed leader in Saudi Arabia's sugar industry, SFC accounts for over 70% of our home market, in addition to being the leading supplier in Jordan, with 40% of the sugar market.
In 2020, United Sugar Company achieved SAR 2.3 billion in sales from 1.3 million metric tons of refined sugar, including United Sugar Egypt Company which is equity accounted, of which 795,000 metric tons were exported, accounting for SAR 1.22 billion.
Our Al Osra brand is the leading sugar brand in the Kingdom, with the highest awareness and usage KPIs, which is a direct result of our dominant market presence and continuous brand-building activities.
Our specialty range of brown sugar continued to perform well during the year, supported by in-mall activations, marketing campaigns, and engaging content and recipes to increase in-home penetration and consumption.
We also expanded our convenience range to offer not only on-the-go solutions (i.e. sachets and cubes) but also our first ever icing sugar shaker, as a convenient baking solution at home, while also supporting our range through enhanced in-store visibility and marketing activities.
20.8% 36.5% 40.3% 74.7%
Pasta
The Savola Foods pasta business is largely focused on Egypt, where we are the biggest producer of pasta by market share, accounting for more than 40% of the branded packaged market in 2020. The Company's flagship El Maleka brand leads the packed pasta market in Egypt, contributing to SFC's SAR 537 million in annual sales.
To reinforce this leading position, Savola Foods has been concentrating on product-based marketing since 2019; this has had exceptional results, as seen in the excellent sales growth for our Italiano pasta brand. Savola Foods achieved sales volume of 284,000 metric tons of pasta in 2020, with exports accounting for 48,000 metric tons and over SAR 80 million.
The Company also re-launched El Maleka pasta brand in Egypt, using an improved product formula, a new distinctive packaging design, and a comprehensive marketing campaign.
An Innovative Response to Market Disruption
SFC responded to the crisis with agility and adaptation, amending our plans to mitigate the business implications of COVID-19. This included the design and roll out of structural changes in our organization and operating systems, such as a new marketing structure, functional delegation of authorities, roles and responsibilities, the new stage innovation gate process, and the roll out of SFC's objectives, goals, strategies and measures covering all functions.
2019
SFC has one of the largest Consumer Understanding and R&D Centers in the region. The capabilities and expertise within this center ensure that we are always listening to our customers, understanding their evolving needs, and developing our products and initiatives to satisfy and delight them.
In 2020, we interviewed more than 50,000 consumers to learn their preferences, desires and requirements, as well as to gain insights and uncover trends in the rapidly changing marketplace. The knowledge and understanding gained through this process ultimately supports our innovation pipeline across 4 key areas: health and wellness; new taste preferences; convenience; and value for money solutions. This led to the launch of more than 10 innovative B2C products during the year - covering oils, ghee, pasta and bakery - and laid the foundation for further product innovation in the coming year.
2021 Outlook
Savola Foods maintains a rich and diverse innovation pipeline, with multiple launches of new initiatives across all product categories planned for 2021, providing functional differentiation that will set SFC apart within the region's food industries.
In the coming year, we will devote increasing focus to B2B growth as and when markets recover from the effects of the pandemic. We will also seek to maximize the opportunities provided by the recent launch of peanut butter spread in Sudan, DAKWA.
As we look to capitalize on this recovery, we will continue to turn challenges into opportunities, guided by our comprehensive '4 by 4' plan for 2020-2024, which sets out a strategic path for growth and value creation through its 4 pillars:
• Growing today's existing business through line extensions
• Investing in new trending categories
• Penetrating new categories in the region
• Capitalizing on increasing food service online spend to accommodate new trends and needs
Almarai
Savola is the largest shareholder in Almarai, the world's largest vertically-integrated dairy and a leading food producer and distributor in the Middle East. With a 34.52% holding in the company, Almarai represents a key strategic investment for Savola.
About Almarai
Established in 1977 and one of Saudi Arabia's leading brands, Almarai is trusted for its quality throughout the Kingdom, the GCC and beyond. As a key pillar of the MENA food market and a leader in major food categories such as dairy, bakery, poultry and juice for Saudi Arabian consumers, Almarai represents a highly strategic investment for Savola. Solidifying this prominent market position, Almarai remains at the forefront of innovation in the sector, introducing multiple new product offerings each year that cater to the evolving needs of the local population in Saudi Arabia.
Net Income (SAR million)
Financial and Strategic Highlights in 2020
In 2020, Almarai continued to deliver its highly popular products throughout the Middle East, despite the significant uncertainty and operational complexity generated by the COVID-19 pandemic, driven by its commitment to provide 'quality that you can trust'.
By putting the safety of its customers and employees first, whilst also prioritizing the health and wellbeing of the communities it serves, Almarai was able to continue delivering essential products to nations across the region in a reliable and responsible way throughout 2020. Furthermore, the company maintained its commitments to shareholders by rewarding investors with a recommended increase in annual dividend.
Savola Shareholding
Almarai preserved its leading market share across multiple segments, including dairy, juice and poultry. Compared to 2019, revenues for food rose by 15%, long-life dairy by 18%, poultry by 8%, fresh dairy by 2% and fruit juice by 3%. Overall revenue for 2020 grew by 7% over 2019, while net income rose by 10% for the year.
Almarai's brand equity continued to build during the year, having been named Most Chosen Fast-Moving Consumer Goods (FMCG) Brand by Kantar, KSA Brand with the Most Loyal Customers by the YouGov Customer Loyalty Rankings, and among the Kingdom's most influential brands by IPSOS.
Earnings Per Share (SAR)
1,984
2.02
1,812
1.83
Al Kabeer Group of Companies
As one of the GCC's leading frozen food suppliers,
Al Kabeer is a household name in the region, having served the people of the GCC since 1974. With a 51% stake in the business, Savola retains a key strategic foothold in the GCC's substantial and growing frozen foods market.
Al Kabeer plays a prominent role in delivering Savola's strategy, providing robust growth prospects and catering to a dynamic population.
737
Revenue (SAR million)
About Al Kabeer Group of Companies
Today, Al Kabeer manufactures and distributes a portfolio of more than 200 products for markets across the region, including frozen poultry, beef, seafood, snacks and ready-to-eat meals. The brand maintains 3 key manufacturing facilities, located in the UAE and Saudi Arabia, producing products for distribution via a network of 9 cold storage facilities and 11,000 outlets in the GCC.
Financial and Strategic Highlights in 2020
True to its well-established reputation, Al Kabeer has played a key role in supporting the region's food security during the course of the COVID-19 pandemic by providing a dependable supply of high-quality products to communities throughout the GCC.
Al Kabeer's business-to-business (B2B) sales were undermined by the national lockdowns across the region and the hiatus in religious tourism in the Kingdom, placing increased pressures on restaurants and catering companies.
Net Profit (SAR million)
However, our consumer business was positively impacted as customers chose to consume frozen foods at home in preference to dining out.
As consumer demand per capita for frozen foods grew dramatically during the pandemic, Al Kabeer quickly and efficiently rose to meet this supply challenge, ensuring sufficient production across its footprint. The growing preference for frozen food has also served to gain greater exposure for our products in new consumer segments - creating opportunities that will remain going forward.
Al Kabeer therefore performed well in 2020, despite the challenging environment. Top-line sales increased by over 18.87% compared to 2019, driven by strong growth, while Al Kabeer's market share in the relevant categories increased by 3% on a value basis. Profitability grew by more than 59%, with net margins improving from 11% in 2019 to 13% in 2020, as a result of the increased diversification of the product mix, improved material pricing, and the operating leverage.
Savola Shareholding
107
67
To preserve the health and wellbeing of its employees and customers during 2020, Al Kabeer implemented stricter safety and hygiene standards in all of its facilities and throughout its distribution network, whilst successfully navigating increasingly complex supply chain logistics owing to movement restrictions, maintaining our position as a dependable supplier for retail clients and local consumers alike.
As a key element in Savola Group's vision to increase the contribution of value-added categories to its food portfolio, Al Kabeer plays a prominent role in delivering Savola's strategy, providing robust growth prospects and catering to a dynamic population.
Al Kabeer also supports the ongoing efforts to promote the growth of the local manufacturing sector in the Kingdom. In addition, it reinforces the trend to strengthen the cold distribution chain and ensure food security, particularly through ramping up its processing facility in King Abdullah Economic City. In the coming years, Al Kabeer plans to carry out additional complementary expansions for its manufacturing lines and cold storage facilities in the Kingdom.
Retail Investments
Our resilient retail portfolio delivered an encouraging performance in 2020, establishing strong foundations for future growth.
13%
Panda expanded to 13% of the total grocery market in Saudi Arabia, and 28.6% of the hypermarket/supermarket segment in 2020.
Total Number of Panda Stores
205 205
2019 2020
Panda Selling Area (m2)
634,399
2019
Total Number of Herfy Branches
2019
394
628,189
2020
2020
400
Panda Retail
Panda expedited its efforts in the online channel with the introduction of PandaClick.
As one of the Middle East's largest grocery retailers, Panda Retail is a household name in the region, with a presence in more than 41 cities through 201 stores across Saudi Arabia, as well as 4 locations in Egypt. Panda maintained its market-leading position in 2020, supplying essential goods to its customers and contributing to the Kingdom's food security throughout the COVID-19 crisis.
In the face of market disruption in 2020, Panda Retail remained the leader of the grocery retail market in Saudi Arabia, ensuring a reliable supply of quality products for households and communities across the entire Kingdom throughout this unprecedented year.
Despite a challenging macroeconomic environment, Panda has achieved positive results in 2020. While its footprint remained largely unchanged, with 201 stores in 41 cities across the Kingdom and 4 locations in Egypt, Panda has cemented its market leadership to capture 13% of the entire grocery retail market in Saudi Arabia, as well as 28.6% of the Modern Trade (i.e. Hypermarket and Supermarket Channels).
Navigating the Highly Challenging Market Conditions
This year has been characterized by economic pressure on a range of customer segments in the Kingdom.
The COVID-19 pandemic has affected consumer spending negatively and increased cost of living pressure, which in turn impacted the purchasing power of individuals in the Kingdom. The increase in value-added tax (VAT) in July 2020 also contributed to a change in the spending habits of families throughout Saudi Arabia.
The expected contraction in the expatriate population, owing to the effects of COVID-19 on the economy, has also undermined Panda's customer base in 2020; a total of around one million expatriates are expected to have left the country in 2020.
Market share of Modern TradeMarket Share of Total Grocery Retail
Panda Growing Online Presence
Capitalizing on the shift towards e-commerce in 2020 because of the lockdowns and movement restrictions throughout the Kingdom, Panda expedited its efforts in the online channel with the introduction of PandaClick.
PandaClick immediately established a strong position in the online grocery shopping market - having been downloaded by hundreds of thousands of customers - and signaled the first step in the rollout of the new omnichannel strategy for Panda.
Panda's social media presence has also quickly developed and expanded throughout the year, and it now enjoys a growing pool of followers across major social media platforms. This has allowed Panda to precisely target its offers to specific clusters of relevant customers, leading the industry with its tailored communications methodology.
Customer Count (million)
28.6%
13%
+106
+100
25%
11%
2019
2020
2019
2020
2019
2020
Panda Retail
Panda revealed its new store design concept in November 2020 with the opening of the first of its new-look outlets.
145
Panda's Strategic Response
Panda ensured complete compliance with the precautionary safety measures issued by the Ministry of Health, as well as with international guidelines and universal standards adopted to stem the spread of the virus.
Whilst implementing multiple temperature checks for customers and employees across its operations and stores, Panda also initiated regular deep sanitization programs to ensure the safety of its outlets and optimized its store capacities to enable social distancing.
Moreover, Panda moved quickly to provide pre-packed Panda boxes containing essential items to the customers not willing to visit stores during the COVID-19 crisis.
At the height of the COVID-19 crisis in 2020, Panda was able to deliver on its commitments to customers by serving communities across the Kingdom through its national network of stores. Its extensive supply chain showed exceptional resilience, allowing for the timely delivery of products to its stores throughout 2020.
This included meeting the unique requirements of Ramadan and positioning Panda as a reliable partner of choice for customers unable to perform Umrah in 2020 by providing more than 11 million bottles of Zamzam water to its customers.
A Fresh Approach
Panda revealed its new store design concept in November 2020 with the opening of the first of its new-look outlets.
Created with a strong focus on fresh food, the new concept is repositioning Panda as the store of choice when it comes to fresh categories, with a view to also creating a halo effect for the other categories.
60
By introducing modern display fixtures to its remodeled fresh department, Panda aims to create a harmonious shopping experience for its customers, complete with visually appealing displays and state-of-the-art lighting solutions. The new design features a fresh food area that has been increased to capture higher share of the total sales area, with specialist sections, and around 1,500 new Stock Keeping Units (SKUs). Since its introduction, fresh sales have shown healthy growth in the pilot store, driven by both customer count and basket size.
Complementing this new fresh concept design, Panda also improved the share of direct sourcing for its fresh products, working directly with growers, producers, and manufacturers to improve quality and create additional value for its customers. This approach is now enabling Panda to differentiate its offering and introduce competitive pricing.
A Resurgent, Customer-Centric Brand
Panda's turnaround - initiated at the end of 2017 - continues to deliver encouraging results.
The turnaround strategy has focused on establishing the foundations from which to deliver a differentiated customer-centric model. To this end, Panda has worked diligently to harmonize its product offering with its customers' needs and demands.
At the same time, Panda has also succeeded in improving fill rates and on- the-shelf availability levels, and has achieved the no. 1 rank among all retailers in the Kingdom in terms of its partnerships with suppliers according to an in-depth survey conducted by Advantage Analytics INISIGHTS.
Completing our Turnaround in 2021
Under the leadership of Panda's executive team, Panda aims to complete the full turnaround in 2021.
Specifically, Panda aims to secure a significant net improvement in its in-store customer experience by introducing an increasingly differentiated offering, backed by excellent customer service at all touchpoints.
To complement the in-store experience, Panda aspires to strengthen its omnichannel positioning further enabling it to be the grocery retailer of choice for its customers across all channels.
Panda also intends to achieve a shift in management culture towards a more agile and performance-driven organization.
Transformation Program
Through its business transformation strategy, Panda intends to emerge not only as a leading player in the Kingdom's grocery retail market, but also a leader in shaping the future of the industry.
Supermarkets
Hypermarkets
Herfy Food Services Company
With a 49% stake in Herfy, one of Saudi Arabia's most popular fast food brands, Savola is the largest shareholder in a key player of the nation's Quick Service Restaurant space.
Since Savola's initial investment in the company in 1998, Herfy has served as the Group's platform in the growing Quick Service Restaurant (QSR) space.
1.07
About Herfy
Herfy Food Services Company, established in 1981, is Saudi Arabia's leading fast food chain, with 388 branches serving communities across the Kingdom and an international franchise with a presence of 12 branches in Kuwait and Bangladesh.
Herfy also operates a network of pastry shops and bakeries under the trademark "Doka", and is recognized as being among the country's first, fully-integrated food services companies, operating its own bakery, cake, rusk and meat processing facilities.
Revenue (SAR billion)Net Profit (SAR million)
Financial and Strategic Highlights in 2020
Since Savola's initial investment in the company in 1998, Herfy has served as the Group's platform in the growing Quick Service Restaurant (QSR) space. Faced with the immense disruption to the restaurant segment caused by the COVID-19 pandemic and the resultant lockdowns introduced to curb the spread of the virus, Herfy's story in 2020 was one of steadfast resilience.
Savola Shareholding
Despite the closure of many stores as a result of the national curfews, and the limited operations thereafter owing to social distancing guidelines, Herfy succeeded in distributing dividends to shareholders and expanded the digital presence of the brand.
Earnings Per Share (SAR)
196
3.03
53
0.82
Our People
We remain dedicated to delivering on our value proposition, which offers a healthy and positive working environment for all of our employees.
Our People Across Savola, more than 3,000 new Saudi Nationals were hired during 2020. The Engine of Our Success 3,000+ Responding to COVID-19 Savola is committed to attracting and nurturing exceptional talent across our family of more than 24,000 employees, including more than 18,000 based in Saudi Arabia. Savola's COVID-19 response placed our people at the heart of all our actions. We immediately moved to protect our employees by designing and implementing a precautionary plan built on information provided by the Ministry of Health and other reliable health authorities. This plan emphasized the urgency of a transition to remote-working and a broad information campaign to increase employee awareness concerning COVID-19. We have succeeded in turning challenges into opportunities in 2020, despite the significant disruption experienced across the nation and the world, by protecting our people while pushing forward with the We value our people above all else. Faced with the threat posed by the COVID-19 pandemic, Savola immediately moved to prioritize the health and wellbeing of our employeesWe therefore remain dedicated to delivering on our value proposition, which offers a healthy and positive working environment for all of our employees, backed by a broad range In confronting the pandemic, Savola immediately formed a Crisis Committee to oversee its response and ensure full compliance at all our offices, sites and stores, in line with the guidelines released by the Kingdom's authorities. The main objective of the Crisis Committee was to | Organizational Culture RIGHTEOUSNESS We undertake the responsibility of maintaining the trust put in us FULFILLMENT We show responsible actionsto those who trust us RELEASEDNOURISHMENT INTEGRITY We function through an organizational culture of integrity, righteousness, fulfillment and persistence. Putting the right resources into the right investments PERSISTENCE Our realization, evaluation and improvement of our own potentials |
strategy throughout 2020.
opportunities. By working together, we have achieved a great leap forward in terms of our ambition to become the undisputed employer of choice in the food and retail industries in the MENA region.
effects of the pandemic, while maintaining maximum flexibility and adaptability.
Isolation rooms were established within employee residential compounds and information campaigns were launched throughout the crisis to raise employee awareness regarding the virus and how best to protect themselves and their families.
All frontline employees were immediately issued with personal protective equipment and materials to reduce the threat of infection. These included masks, gloves and hand sanitizers, as well as special plexiglass barriers at checkout areas. All of these frontline workers received a special allowance in view of their exceptional efforts during the worst period of the pandemic. Meanwhile, those employees who were able to work remotely continued to fulfill their roles from home during this period.
As our employees returned to office working conditions, we took every precaution to ensure their health and safety. Signs were used to provide reminders of active precautionary measures and policies, temperature checks were established and special hygiene kits distributed to all employees, containing facemasks, sanitization items and gloves.
Vision
To be the employer of choice in the food and retail industry in the region
Mission
• Attract and sustain best available talent to meet current and future demands
• Adhere to nationalization and enhance employment brand
• Promote an engaged environment to support change and increase productivity
• Leverage technology, social media and systems to raise the level of HR services standards
• Develop highly skilled workforce that will learn, lead and respond to challenges
• Balance resourcing and cost management
Our People
Throughout this challenging period, all our employees were kept updated with regular internal awareness communications via live sessions, emails and posters, while precautionary measures including sanitization and physical distancing were rapidly implemented across the organization.
In view of the restrictions imposed as a consequence of the pandemic, Savola represented by Panda Retail, also conducted its first ever Virtual Career Fair in 2020 in collaboration with the Ministry of Human Resources and Social Development and the Human Resources Development Fund (HRDF), leveraging Savola's rapid technological advancement to provide an alternative channel for potential candidates to apply for employment opportunities in restricted circumstances.
Our resilience in facing the pandemic was partly a consequence of the strong corporate values we espouse as a Group - Righteousness (ىوقتلا), Integrity (ةناما), Persistence (ةدهاجملا) and Fulfillment (لا). Drawn from our rich Islamic heritage, these values were instrumental in keeping us focused on our strategic goals and day-to-day duties, both as individuals and as a Group, throughout the challenging events of 2020.
ّ
Savola's employee engagement and recognition activities in 2020 sought to maintain the high standards of our working environment and our reputation as an employer of choice.
Engaging our Employees
We believe that our exceptional people form the bedrock of our ongoing success as a company and are crucial to the long-term sustainable growth of Savola. Our aim is nothing short of being recognized as the undisputed employer of choice in the food and retail industry within the region. Guided by our Employee Value Proposition methodology and our core values, this aim drives the delivery of our employee engagement and investment in human capital.
Savola's employee engagement and recognition activities in 2020 sought to maintain the high standards of our working environment and our reputation as an employer of choice.
As an extension to our Tawer Employee Engagement Program, we participated for the first time in the Great Place To Work award, achieving a rank among the Top 20 companies in the Kingdom's private sector. The rank was based on a 2019 Culture Audit and Engagement Survey conducted by the Institute, which revealed a 78% level of engagement. Great Place to Work® is a global authority that focuses on recognizing outstanding high-trust, high-performing workplace cultures around the world.
By maintaining our exceptional employee value proposition throughout the crisis, we reaffirmed our position as a competitive employer of choice in the region's food and retail industry, with a rising retention rate that reached 91% in 2020, up from 89% in 2019.
With a view to further enriching our credentials in this regard, we launched a Long-Term Incentive Program in 2020 - the Align Program. This comprehensive raft of inducements aims to reward top executives for achieving the Group's strategic objectives, and to retain key talents in mission critical roles.
Our Long-Term Incentive Program (LTIP), the Align Program, is an innovative approach to retention that will be extended in the future to other areas. Savola purchased 341,675 shares at SAR 48.32 per share, for a total value of more than SAR 16.5 million (USD 4.4 million), to keep them as treasury shares under the first tranche of the LTIP.
Tawwon and Home Loans
Savola continued providing its employees with a range of unique benefits, such as an employee home loan scheme for Saudi employees, Takaful insurance to support families in the case of death or disability, and (Tawoon) fund to assist junior staff in dealing with financial emergencies. The Group also obtained discounted corporate employee rates with leading brands and corporates, including those in sectors such as healthcare, retail, cafes, restaurants, hotels, and many others through the introduction of a branded mobile application.
Nationalization
Savola remains wholeheartedly committed to nationalization and the objectives of Saudi Vision 2030 for greater inclusion of Saudi nationals across all of the Kingdom's economic activities. We maintained our Platinum Zone Nitaqat rating at our HQ in 2020, as did Savola Foods Company, while Panda continues to make significant improvements, achieving the Green Zone. At year-end, we reached a total of 6,893 Saudi citizens across HQ, SFC and Panda, accounting for 37% of our total workforce and an increase of 21% over 2019.
Diversity
At Savola, we consider our diversity to be one of our key strengths and a crucial element in our strong performance and corporate ethos. We are broadly recognized for our gender inclusive policies and female empowerment credentials with women accounting for 1,285, or 7%, of our workforce at end-2020.
Meanwhile, our Makeen program continued to grow and have a positive impact for Savola and the communities we serve. Since 2010, Makeen has focused on increasing the number of disabled people in private sector employment. During this year, it continued to offer multiple free training programs to government organizations, NGOs and private sector companies on good conduct in their interactions with disabled people.
Learning, Development and Succession Planning
Succession planning continued to be a key focal point for Savola, ensuring that proper plans and contingencies are in place for key positions across the organization. Savola identified functional development gaps for all key roles through several assessment platforms and channels.
We always look to promote and empower the talent across Savola. During 2020, we were able to internally source 2 employees from our operating companies during the year, including our new CFO. We also introduced new guidelines and processes to implement effective planning at the various levels within the Group to ensure smooth and efficient knowledge retention processes.
Despite the various challenges we faced in executing our learning and development plans for the year, we succeeded in delivering more than 60% of our planned training in 2020, prioritized according to the importance of the course and the ease of transferring the training to an online platform. For example, one element in our 2020 learning and development plan that was prioritized was a collaboration with INSEAD to develop high-potential future managers by enrolling them in the Developing Emerging Leaders Program.
Having successfully navigated the complexities of the emergency response to the COVID-19 pandemic, including the transition to online communication, working and training, both the management and employees of the Group have not only succeeded in executing their assigned projects and tasks, but also rapidly increased their personal and professional development curves as a result, as has been reflected in the annual results of the Group.
In Savola Foods Company, we delivered the second round of our Executive Leadership Program, "Iqtedaa," in 2020 in partnership with McKinsey & Company, with 30 participants at Director and Executive Director levels. In addition, professional development and capability building activities continued across all levels via virtual delivery methods throughout the year.
Safeguarding Savola's People and Practices in 2021 and Beyond
Building on our HR strategy to become the region's employer of choice in the food and retail industry, in 2021, Savola will continue to focus on 4 key strategic pillars that have been designed to provide our people with a uniquely rewarding culture and working experience.
Aside from keeping our employees safe amid the ongoing COVID-19 pandemic, as part of our Wellness Program, which promotes better physical and mental health outcomes, we plan to engage with various initiatives such as World No Tobacco Day, World Health Day, Breast Cancer Awareness and World Diabetes Day in 2021.
We will also pursue further Employee Engagement based on respect, trust, integrity and open communication with our people to motivate them to contribute to our collective success and mutual wellbeing.
Our Work-life Balance objectives remain central to our employee value proposition, and we will continue to adopt family-friendly policies such as flexible and remote working options, as well as events such as Kids Day, World Book Day and the International Day of Friendship.
Finally, Savola will deliver further initiatives as part of our Culture Improvement Program to accentuate the shared values, attitudes, standards and beliefs that our people embody through further team-building activities and synergies across the Group, including via our Sela employee social scheme, team iftars during Ramadan and Eid, and Saudi National Day celebrations.
Building on the foundations established in 2020, as a consequence of the rapid shift to remote working for suitable functions and roles, Savola will drive further automation, digitization and process reengineering in the coming year. New technologies and reporting tools will be implemented across all functions and units to maximize efficiency, streamline business processes and standardization, and increase productivity.
In 2021, Savola Foods Company will launch a highly innovative top talent recruitment and retention strategy to guide our activity in this area going forward.
SFC will also continue to develop and enhance the leadership skills of staff from management down, reflecting the latest global trends and educational approaches, whilst also developing our internal culture and working environment with the goal of becoming a 'regional benchmark' in our industry.
Panda's major goal for 2021 is to build upon the sense of enthusiasm, ownership and accountability among our people regarding the successful delivery of the Company's overarching strategy.
Throughout 2021, Panda will continue to further entrench in its employees a culture of excellence that spans every aspect of our business, complemented by improvements across the Company's performance management system. In doing so, the Company also aims to enhance Panda's ability to attract, grow and retain people of exceptional talent with core capabilities and competencies through the development of long-term Talent Acquisition and Development Strategies.
CSR and Sustainability
Our values, strategy and actions are all influenced by our commitment to sustainability and social responsibility, which permeate every aspect of our business.
Sustainability plays a central role in our business, our industry and the mindsets of our organization and its people. We therefore undertake a broad variety of initiatives to deliver a cleaner, greener company through our newly established flagship CSR body, the Savola World Foundation. These initiatives aim to deliver lasting change for our people, the Kingdom and the community we serve.
Committed to Serving Our Community
Our values, strategy and actions are all influenced by our commitment to sustainability and social responsibility, which permeate every aspect of our business. We are proud of the considerable progress we have made in this area to date, but recognize that in order to respond effectively to sustainability challenges we must continue to strengthen our engagement with stakeholders and apply new tools to enhance our sustainability goals.
As the extent and severity of the COVID-19 pandemic became clear, we immediately mobilized to assist the efforts of the Ministry of Health to combat the spread of COVID-19. Leveraging our leading position in the Kingdom's food and retail industry, as well as our network of partners and suppliers, Savola played a key role in preserving the food security of the people and community across the country in the face of the crisis, ensuring the continued supply of essential goods throughout.
We also ramped up our support for social programs during the year. Given the immense economic and social upheaval caused by the pandemic, we allocated SAR 10 million to assist communities across the nation, supporting the national Health Endowment Fund and engaging in our own relief initiatives.
These included distributing 20,000 food baskets to needy families in neighborhoods severely affected by the virus across the Kingdom of Saudi Arabia, in coordination with relevant governorates, and producing a series of viral awareness videos aimed at building collective public awareness via social media with regard to measures to prevent the spread of COVID-19.
A Steadfast Foundation for Further Action
Building on the considerable success of our Savola World platform - established in 2017 with the aim of promoting socially responsible behavioral change across the region - in late 2019 we transformed Savola World from a department into a standalone private foundation. In keeping with international best practices established among corporate bodies concerned with sustainability, the Savola World Foundation is now a private foundation under the supervision of the Ministry of Human Resources and Social Development.
This transformation enables the Foundation to champion more effectively the sustainability and social development objectives of Saudi Vision 2030 and the UN Sustainable Development Goals (SDGs). It also allows it to seek funding from, and form partnerships with, both government and
private sector entities, and broadens the scope of its engagement to include new sectors beyond food and retail.
The Foundation is primarily funded by Savola and is managed by a Board of Trustees that replaces Savola's CSR Committee. We have also already begun working alongside a variety of highly qualified, internationally acclaimed experts in order to maximize the impact of our programs and self-sustaining revenue streams, with a particular focus on social awareness campaigns, coaching and training.
Core areas of interest for the Foundation will be business assistance, youth skills development and waste reduction. We aim to provide technical and financial support to SMEs to optimize their businesses. The Foundation will also develop vocational and technical skills in young people to assist them in entering the Kingdom's labor market, and continue Savola's extensive engagement in encouraging businesses and individuals to rationalize consumption and reduce waste by introducing long-term behavior change to create a more sustainable society.
Long-term Programs Portfolio
This is a vision of the foundation program portfolio. A program is an umbrella that combines different initiatives that share the same indented impact. The programs portfolio suggests a structure for the foundation programs.
Savola World Foundation ProgramsThe Materiality Process
At Savola, we conducted a comprehensive materiality assessment to better understand the needs and expectations of our stakeholders, and to take into account a broader range of national, regional and global challenges, trends and approaches.
We engaged with both internal and external stakeholders to identify critical sustainability issues, and consulted international standards, frameworks and best practices to design and conduct the materiality assessment in accordance with the principles of the standards of the Global Reporting Initiative (GRI). This process included the following stages:
An important outcome of the assessment is the development of Savola Group's materiality matrix, which illustrates all the material issues and their prioritization. As well as demonstrating our commitment to sustainability, the matrix represents an invaluable tool for risk management and opportunity identification, which has revealed 30 material topics across our 5 strategic pillars: Employees, Community, Our sector, Environment and Business.
Supporting Emerging Businesses to Achieve Growth in GDP
• Vocational and technical skills development program
Developing Youth Skills
• Consumer and supply chain waste reduction program
• Savola companies waste reduction program
• B2B sustainability awareness program
Waste Reduction
Others
• Makeen - people with disabilities (PWD) enablement program
• Ataa - volunteers engagement program
Our Current Programs include the following:Meanwhile, our Makeen program - which works to broaden access to the workplace for people with disabilities (PwD) - will play a role across the full range of initiatives rolled out by the Foundation, as will our Negaderha waste prevention and our employee volunteering program.
Delivering on Saudi Vision 2030
Savola strategy in the field of sustainability, embodied by Savola World Foundation, shares mutual objectives with various local authorities and government bodies, including, most importantly, Saudi Vision 2030. Our efforts are therefore closely aligned with the long-term success of Saudi Arabia outlined in this blueprint for the future of the Kingdom based on 3 pillars:
• A vibrant society;
• A thriving economy; and
• An ambitious nation.
In line with this agenda, Savola's growth strategy focuses on initiatives that directly benefit the Kingdom's socio-economic development whilst building a prosperous nation and a more dynamic, robust economy.
We have strengthened our relationships with carefully selected partners and distinguished shareholders and investors, with the aim of ultimately satisfying the economic and social aspirations of Saudi Vision 2030. Meanwhile, we continue to contribute to Saudi society through our Makeen PwD program, Sela family program, Tawer employee engagement scheme, housing loans for Saudi employees, Takaful insurance provision and Tawoon Fund.
Alignment with International Goals and Standards
Our strategic commitments to sustainability and social responsibility, are informed by the objectives and best practices of international frameworks and global initiatives, including the Standards forSustainability Reporting developed by the Global Reporting Initiative (GRI); Standard & Poor's Transparency and Disclosure Standards, and the 17 UN Sustainable Development Goals (SDGs).
Our strategy can be linked to 6 out of the 17 SDGs:
Makeen
Our enduring commitment to empowering people with disabilities across the Kingdom is known throughout our industry. Savola is one of the founders of the Qaderoon Business Disability Network of employers and holds a Gold Category Mowaamah Certificate for the advancement of people with disabilities.
This commitment is embodied by our Makeen program, which is dedicated to increasing the number of disabled people in private sector employment. Since its inception in 2010, Makeen has recruited 1,221 employees with disabilities and offered multiple free training programs to government organizations, NGOs and private sector companies on good conduct in their interactions with disabled persons.
Makeen's online portal, which brings together disabled job seekers and private sector employers, has facilitated the employment of many people with disabilities since its establishment in 2017, including 51 in 2020.
In responding to the COVID-19 pandemic, Makeen produced infographic videos about safety tips and measures during the pandemic specifically for persons with physical, hearing, visual and intellectual disabilities. We also participated in a virtual conference arranged by GBDN-ILO titled "Business Leadership in Disability Inclusive Responses to COVID-19", and a virtual seminar on "presenteeism, psychological health and work performance during the pandemic".
Other engagement activities during 2020 included participation in the global initiative "purple light up" by capturing and sharing Savola Group's experience in recruiting persons with disabilities via the Makeen program. The resultant short film was broadcast worldwide during the International Day of Persons with Disabilities on 3 December 2020.
We also launched the Mowaamah Platform via the Savola intranet. The platform provides valuable resources for all the individuals interested in building their knowledge and practices on various disability-related issues including: etiquette and guidelines; policies and procedures; the concept of universal accessibility; web accessibility (W3C Standards); and services and support programs.
Also, accreditation was achieved from Technical and Vocational Training Corporation about the training content of the mentor and buddy program.
Makeen program also participated in the celebration of the International Day of Persons with Disabilities, which falls on 3 December every year through social media, and launched an infographic film on this occasion entitled "Not all disabilities are visible" to spread awareness in society about the different types of disabilities. It also participated in several virtual forums such as "Vision" and "Ibsar" forum with associations of persons with disabilities such as World Sight Day and White Cane Day to increase community awareness and relevant bodies on the rights of persons with disabilities and to praise their achievements and their social and economic role in society and in national development plans.
Additionally, Makeen participated in several workshops to promote digital accessibility for persons with disabilities, such as the virtual workshop titled "Concepts and Trends of Digital Accessibility" and the "Qualifying Applications on Smart Devices to be accessible for persons with Disabilities" workshop.
Makeen also took part in a workshop organized by the Prince Mishaal bin Majid bin Abdulaziz Center for Social and Humanitarian Research under the title "The Contribution of the Private Sector in Employment of Persons with Disabilities - Reality - Obstacles - Requirements for Success" and in a workshop organized by the General Presidency for the Affairs of the Grand Mosque and the Prophet's Mosque under the title "The Total Accessibility Program in the Two Holy Mosques" in which Makeen made several proposals to facilitate access to the built environment, services and communication to empower persons with disabilities.
To enhance community awareness of various disability issues, Makeen program produced a set of infographic films in both Arabic and English developed with inclusive communication standards such as sign language and written text. It addressed a variety of issues including Introduction to the Makeen program, goals and services provided, the feasibility of employing persons with disabilities, the mentor and buddy program, the universal accessibility program and effective communication with people with mobility, hearing, visual and intellectual disabilities (autism).
Negaderha
Negaderha
The Negaderha program is our food waste management and reduction scheme that was developed to address this nationally important problem. Through this program, we currently target 2 main segments of society - households and the HORECA (hotels, restaurants and cafés) industry - among whom we raise awareness of the dangers of food waste.
In view of the food security implication of the COVID-19 crisis in 2020, Negaderha introduced a series of graphic videos about consumer and food safety through social media, covering the full consumption cycle, from shopping tips to food sanitizing, storage and cooking.
Negaderha also made progress towards planning and implementing its initiative for primary school children. The initiative tackles food waste on a household level and promotes knowledge and a culture of food waste reduction amongst children aged 6 to 10 years old. By introducing a superhero character that educates children by embracing adventures and delivering awareness messages tailored for children, our superhero will take children on exciting journeys on food waste reduction. The first episodes of this groundbreaking initiative will launch in 2021.
Ataa
Corporate volunteering in Savola took center stage in 2019. We are proud of our achievements in this field, including the launch of the Group's volunteering program, building valuable partnerships and increasing the participation of our employees in volunteering activities. Our employees achieved 787 volunteer hours in the 3 months after introducing the program.
Volunteering Activities
Distributing Ramadan food baskets to beneficiariesPacking and distribution of meals
Distributing Ramadan Charity Company products (example sugar and oil) to beneficiaries on an annual basis
Visiting King Fahad Hospital
Visiting Hisham Attar Center for Dialysis
Visiting Neda Al Amal Rehabilitation Center
Delivering educational workshops
As we work to integrate volunteering into our corporate culture, Savola incorporated volunteering into our annual employee performance indicators. We also designed activities that will contribute to the personal and professional growth of our employees and aligned the volunteering program with the Saudi Vision 2030 goal of expanding the impact of the non-profit sector. Key activities included:
Number of Volunteers
10
Partners
Namaa Association
37
Itaam Association (Saudi Food Bank)
Families in need - 150 family members benefited
12
29 charitable societies in various regions in the Kingdom
23
Namaa Association
15
Hisham Attar Center
39
Neda Al Amal Rehab Center
7
Dallah Academy for Volunteering
200 people benefited (students, specialists and enthusiasts)
Impact and Beneficiaries
Families in need - 250 family members benefited
Families in need - 1,500 family members benefited
100 patients benefited
50 kidney failure patients benefited
100 mental disability patients benefitedIn 2020, all volunteering activities were suspended due to the pandemic.
CSR and Sustainability in 2021
We remain wholly committed to supporting the Kingdom in its efforts to stem the effects of the ongoing COVID-19 pandemic on the health, wellbeing and economic progress of the country. Therefore, Savola will continue to allocate funds and commit resources to supporting communities throughout the nation in 2021, providing assistance in any way we can to support the government and other authorities in their efforts going forward.
In particular, through our Makeen program, we will continue to support the specific needs of persons with disabilities in facing the ongoing threat from COVID-19, and assist organizations in implementing PwD-specific measures to protect their workers.
We will also deliver new initiatives under our Negaderha program to ensure the food security of the nation through further education to rationalize consumption andreduce waste, particularly given the disruption to global supply chains caused by the pandemic.
Throughout 2021, Savola will continue to roll out the complete raft of functions of our new Savola World Foundation, including the selection of its new Board of Trustees and the activation of its full program of initiatives. As we do so, we will continue to support the Kingdom in meeting its Saudi Vision 2030.
Directors' Report
62 Main Activities and Financial Disclosures
78 Corporate Governance Report and Major Relevant Disclosure
111 Audit Committee Report
Our commitment to comply effectively with the standards and principles of corporate governance, risk management and internal control systems, as well as international practices in these fields, is what sets us apart.
Main Activities and Financial Disclosures
1) The Group's Main Activities:
Ownership %
Capital
The Group has a broad portfolio of activities. In the foods sector, this is mainly the production, marketing and distribution of edible oils, vegetable ghee, sugar, pasta, baked goods, specialty fats, seafood and frozen food. The retail sector operates a chain of retail outlets. Savola also has significant investments in leading Saudi non-listed and listed companies such as Almarai Co. and Herfy Food Services Co. which operate in the food and retail sectors, and real estate development companies such as Knowledge Economic City, King Abdullah Economic City (Emaar), and Kinan International for Real Estate Development Co., as well as holdings in private equity funds.
No.
Company nameCountry of IncorporationCore activitiesCountry presence
(direct and indirect)
(nominal share value)Number of shares
12. Savola Industrial Investment Co. (SIIC)KSA
Holding CompanyKSA
100%
SAR 205,907,000
205,907
13. El Maleka for Food Industries Co.
Egypt
Manufacturing of Pasta
Egypt
100%
EGP 288,898,960
28,889,896
Savola's subsidiaries, sister companies, investments, activities and country of incorporation:
14. Savola Foods Emerging Markets Co. (SFEM)
British Virgin Islands (BVI)
Holding CompanyOffshore Company
95.43%
SAR 130,000,000
13,000,000
Ownership %
Capital
No.
Company nameCountry of IncorporationCore activitiesCountry presence
(direct and indirect)
(nominal share value)Number of shares
1. Direct subsidiaries of the Company: a) Operating subsidiaries:
15. Afia International Distribution and Marketing Co.
KSA
Trading and DistributionKSA
100%
SAR 6,500,000
6,500
1. Savola Foods Co.
Kingdom ofFoods
Saudi Arabia (KSA)
Holding Company that manages investment in foods sector in KSA and overseas
100%
SAR 2,200,000,000
220,000,000
16. Savola Foods for Sugar Co.
Cayman Islands
Dormant CompanyOffshore Company
100%
USD 50,000
5,000
17. Savola Foods International Ltd. (SFCI)
United Arab Emirates (UAE)Holding CompanyUAE
100%
AED 500,000
500
18. International Foods Industries Co.
KSA
Manufacturing of Specialty FatsKSA
100%
SAR 107,000,000
10,700,000
2. Panda Retail Co.
KSA
Retail
KSA and Egypt
98.87%
SAR 1,480,000,000
148,000,000
19. Seafood International Two FZCO
UAE
3. Good Food Co. (GFC)KSA
Holding CompanyKSA and some GCC countries
100%
SAR 10,000,000
100,000
Seafood Products Trading & Distribution
UAE
60%
AED 100,000
100
20. Afia Foods Arabia Co.
KSA
Holding CompanyKSA
100%
SAR 1,000,000
1,000
4. Al Matoun International for Real Estate Investment Holding Co.
KSA
Real EstateKSA
80%
SAR 100,000,000
100,000
21. Al Maoun International Holding Co. (Al Maoun)KSA
Holding CompanyKSA
100%
SAR 1,000,000
1,000
5. Herfy Food Services Co.
KSA
Restaurants and Manufacturing Bakery Products
KSA, Bangladesh and some GCC countries
49%
SAR 646,800,000
64,680,000
22. Marasina International Real Estate Investment Co. (Marasina)
KSA
Holding CompanyKSA
100%
SAR 200,000
200
23. Commodities Sourcing Company for TradingKSA
Trading CompanyKSA
100%
SAR 5,000,000
500,000
b) Holding and Dormant subsidiaries:
b) Subsidiaries controlled through AIC: (% referred to AIC's direct and indirect ownership; AIC is 95.19% owned by SFC)
6. Adeem Arabia CompanyKSA
Holding CompanyKSA
100%
SAR 1,000,000
10,000
24. Savola Behshahr Co. (SBeC)
Iran
Holding Company
Iran
90%
IRR 740,000,000,000
740,000,000
7. Al Utur Arabian Co. for Commercial InvestmentKSA
Holding CompanyKSA
100%
SAR 1,000,000
10,000
25. Malintra Holdings Ltd.
LuxembourgDormant CompanyOffshore Company
100%
EUR 1,250,000
1,250
26. Savola Foods Ltd. (SFL)
BVI
8. Madarek Investment Co.
Jordan
Holding Company
Jordan
100%
JOD 1,000,000
1,000,000
Holding CompanyOffshore Company
100%
USD 52,000
52,000
9. United Complexes Development Co.
KSA
Dormant CompanyKSA
100%
SAR 4,000,000
400
27. Afia International Co. - Jordan
Jordan
Dormant Company (under Liquidation)
Jordan and Levant
98.57%
JOD 8,000,000
8,000,000
10. Al Matana Holding Co.
KSA
Holding CompanyKSA
100%
SAR 50,000
5,000
28. Inveskz Inc.
BVI
Dormant CompanyOffshore Company
90%
USD 138,847
138,847
2. Savola Foods Company (SFC):
a) Subsidiaries controlled through SFC: (% referred to SFC's direct and indirect ownership - SFC is 100% owned by Savola Group)
29. Afia Trading International
BVI
Dormant CompanyOffshore Company
100%
USD 500,000
500,000
11.
Afia International Co. (AIC)KSA
Manufacturing of Edible Oils
KSA, Egypt, Iran, Turkey, Jordan
95.19%
SAR 500,000,000
50,000,000
30. Savola Foods International
BVI
Dormant CompanyOffshore Company
100%
USD 50,000
50,000
1) The Group's Main Activities continued
Savola's subsidiaries, sister companies, investments, activities and country of incorporation continued
Ownership %
Capital
Ownership %
No.
Company nameCountry of IncorporationCore activitiesCountry presence
(direct and indirect)
(nominal share value)Number of shares
No.
Company nameCountry of IncorporationCore activitiesCountry presence
(direct and indirect)
31. KUGU Gida Yatum ve Ticaret A.S (KUGU)
Turkey
Holding Company
Turkey
100%
TRL 26,301,280
2,630,128
32. Aseel Food - Holding Co.
Cayman Islands
Holding CompanyOffshore Company
100%
USD 50,000
50,000
46. Modern Behtaam Royan Kaveh Co.
Iran
Food and Confectionery
Iran
100%
c) Subsidiaries controlled through SBeC: (% referred to SBeC's ownership; SBeC is 90% owned by AIC)
47. Middle East Technology Venture Ltd.
Cayman Islands
Holding CompanyOffshore Company
100%
33. Behshahr Industrial Co.
Iran
Manufacturing of Edible Oils
Iran
79.9%
IRR 1,023,000,000,000
1,023,000,000
k) Subsidiaries controlled through Al Maoun and Marasina: (% referred to Al Maoun and Marasina's ownership; both companies are 100% owned by SFC)
34. Tolue Pakshe Aftab Co.
Iran
Trading and Distribution
Iran
100%
IRR 100,000,000,000
100,000,000
48.
Alofog Trading DMCCUAE
Trading and DistributionUAE
100%
AED 2,000
50
35. Savola Behshahr Sugar Co.
Iran
Trading and Distribution
Iran
100%
IRR 100,000,000
100,000
3. Panda Retail Co. (Panda):
a) Subsidiaries controlled through Panda: (% referred to Panda's direct and indirect ownership; Panda is 98.87% owned by Savola))
36. Notrika Golden Wheat Co.
Iran
Manufacturing of Food and
Iran
90%
IRR 500,000,000,000
500,000,000
49. Giant Stores Trading Co.
KSA
Retail
KSA
Confectionery d) Subsidiaries controlled through SFL: (% referred to SFLs ownership; SFL is 100% owned by AIC)
50. Panda for Operations, Maintenance & Contracting Services Co.
KSA
Services and Maintenance
KSA
100% 100%
SAR 500,000
SAR 500,000
500 500
37.
Afia International Co. Egypt
Egypt
Manufacturing of Edible OilsEgypt
99.95%
EGP 154,651,500
30,930,300
51. Panda International for Retail Trading
Egypt
Retail
Egypt
100%
EGP 50,000,000
50,000,000
e) Subsidiaries controlled through KUGU: (% referred to KUGU's direct and indirect ownership; KUGU is 100% owned by AIC)
52. Panda Bakeries Co.
KSA
Dormant CompanyKSA
100%
SAR 500,000
500
38.
Savola Gida Sanayi ve Ticaret Anonim Şirketi
Turkey
Manufacturing of Edible Oils
Turkey
100%
TRL 4,433,569
443,356,900
b) Subsidiaries controlled through Giant Stores Trading Co.: (% referred to Giant Stores Trading Co. Ownership; Giant Stores Trading
Co. is 100% owned by Pandaf) Subsidiaries controlled through SIIC: (% referred to SIIC's ownership; SIIC is 100% owned by SFC)
53.
39.
United Sugar Co. (USC)KSA
Manufacturing of Sugar
KSA
74.48%
SAR 395,000,000
395,000
Lebanese Sweets and Bakeries Co.
KSA
Dormant CompanyKSA
95% (99% including
SAR 5,000,000
5,000
Savola direct %)
g) Subsidiaries controlled through USC: (% referred to USC's direct and indirect ownership; USC is 74.48% owned by SIIC)
4. Al Kabeer Group Companies: a) Subsidiaries controlled through GFC: (% referred to GFC's direct and indirect ownership; GFC is 100% owned by Savola Group)
40. Alexandria Sugar Co. - Egypt (ASCE)Egypt
Manufacturing of Sugar
Egypt
68.01 % (71.66% including
EGP 281,838,000
281,838
54. Variety Foods Factory Co.
KSA
Frozen Food ManufacturingKSA
51%
SAR 5,000,000
5,000
SFC %)
41. Beet Sugar IndustriesCayman Islands
Dormant CompanyOffshore Company
100%
USD 1,000
1,000
55. Al Helal for Import & Export Co.
Bahrain
Trading and Distribution
Bahrain
51%
BHD 20,000
200
56. Al Kabeer Holding Co.
UAE
h) Subsidiaries controlled through ASCE: (% referred to ASCE ownership; ASCE is 73.14% owned by SFC directly and indirectly)
Holding CompanyUAE
51%
USD 100
100
42.
Alexandria United Co. for Land ReclamationEgypt
Agro CultivationEgypt
100%
USD 22,500,000
225,000
57. Best Foodstuff Trading Co.
UAE
Trading and DistributionUAE
51%
AED 3,000,000
3,000
i) Subsidiaries controlled through SFEM: (% referred to SFEM's direct and indirect ownership; SFEM is 95.4% owned by SFC)
58. Sahar Enterprises Co.
UAE
Trading and DistributionUAE
51%
AED 181,500,000
181,500
43. Savola Morocco Co.
MoroccoManufacturing of Edible OilsMorocco
100%
MAD 46,000,000
460,000
59. Sahar Food Industries Co.
UAE
Frozen Food ManufacturingUAE
51%
AED 300,000
300
44. Savola Edible Oils (Sudan) Co.
Sudan
Manufacturing of Edible Oils
Sudan
100%
SDG 45,800,000
45,800,000
60. Al Ahsan Trading Co.
KSA
Trading and DistributionKSA
51%
SAR 27,000,000
27,000
45. Afia International Co. - Algeria
AlgeriaManufacturing of Edible OilsAlgeria
100%
DZD 3,028,071,000
3,028,071
Capital | |
(nominal | Number |
share value) | of shares |
j) Subsidiaries controlled through SFCI: (% referred to SFCI's ownership; SFCI is 100% owned by SFC) | |
IRR 1,000,000 | 1,000 |
USD 50,000 | 50,000 |
1) The Group's Main Activities continued
Savola's subsidiaries, sister companies, investments, activities and country of incorporation continued
Ownership %
Capital
2) Consolidated Performance of the Group
No.
Company nameCountry of IncorporationCore activitiesCountry presence
(direct and indirect)
(nominal share value)Number of shares
2-1) Summary of the Company's assets and liabilities and financial results for the last 5 years
b) Subsidiaries controlled through Al Kabeer Holding Co.: (% referred to Al Kabeer Holding direct and indirect ownership; Al Kabeer
a) Comparison of the Company's financial results (SAR million):
Holding is 51% owned by GFC)
Revenues
Net Profit
61. Al Sabah Foodstuff Enterprises Co.
UAE
Trading and DistributionUAE
100%
AED 500,000
500
30,000
62. Cascade Marine Foods Co.
UAE
Frozen Food ManufacturingUAE
100%
AED 750,000
100
26,331
1200
25,000
23,830
1,026
21,815
63. Cascade Investments Limited
UAE
Investment Company
UAE
100%
USD 125,000
1,250
21,406
21,702
1000
911
20,000
800
64. Best Foods Co.
OmanFood DistributionOman
100%
OMR 150,000
150,000
600
476
15,000
400
5. Investees: (investments in sister companies)
200
10,000
65. Almarai Co.
KSA
Fresh Food ProductsKSA
34.52%
SAR 10,000,000,000
1,000,000,000
0
2017
2018
2019
2020
5,000
66. Kinan International for Real Estate Development Co.
KSA
Real Estate DevelopmentKSA
29.99%
SAR 1,694,000,000
169,400,000
0
2016
2017
2018
2019
2020
-200 -400 -600
-363
-520
67. United Sugar Co. EgyptEgypt
Manufacturing of Sugar
Egypt
33.82% (Savola effective ownership
USD 156,000,000
15,600,000
68. Al Seera City Co. for Real Estate DevelopmentKSA
Real Estate DevelopmentKSA
40%
SAR 20,000,000
200,000
Item (SAR '000)
2018
2017
2016
69. Knowledge Economic City Developers Co.
KSA
Real EstateKSA
2.07%
SAR 830,000,000
83,000,000
Revenues
21,814,563
23,830,475
26,330,802
70. Intaj Capital Ltd.
Republic of Tunisia (Tunisia)Fund Management
Tunisia
49%
USD 260,000,000
260,000
Cost of Revenues Gross Profit
(17,916,606)
(19,436,360)
(21,677,838)
3,897,957
4,394,115
4,652,964
Net Profit (loss)
(520,380)
1,025,618
(363,287)
71. United Edible Oils Holding Ltd.
Cayman Islands
Holding CompanyOffshore Company
51%
USD 50,000
50,000,000
b) Comparison of the Company's assets and liabilities (SAR million):
72. Seafood International One FZCO
UAE
Seafood Products Trading & Distribution
UAE
40%
AED 100,000
100
Assets
Liabilities
30000
73. Seafood International Holding Co.
Cayman Islands
Holding CompanyOffshore Company
50%
USD 10,000
10,000
26,658
27,058
20000
25,287
18,119
17,894
25000
23,337
22,252
16,038
6. Investments available for sale: Listed:
15000
13,629
14,231
20000
74. Knowledge Economic CityKSA
Real Estate DevelopmentKSA
11.5%
SAR 3,393,000,000
339,300,000
15000
10000
75. King Abdullah Economic City
KSA
Real EstateKSA
0.87%
SAR 8,500,000,000
850,000,000
10000
76. Arab Phoenix Holdings Co.
Jordan
Real Estate Development
Jordan
5%
JOD 86,840,292
86,840,292
5000
5000
Unlisted:
00
2016
2017
2018
2019
2020 2016 2017 2018 2019 2020
77. Joussor Holding Co.
KSA
Investment Funds (under Liquidation)KSA
14.81%
SAR 600,000,000
60,000,000
78. Swicorp Co.
KSA
Investment ManagementKSA
15%
SAR 500,000,000
50,000,000
2016
2) Consolidated Performance of the Group continued b) Comparison of the Company's assets and liabilities (SAR million) continued
2019
2018
2017
2016*
Business line/country
Brands
2019 (SAR '000s)
5,969,924 20,687,787
5,906,124 16,346,327
6,678,054 8,449,057
KSA and GCC
Al Kabeer, Tayebat Al Emarat, Tabarruk
620,055
16,659,276 16,838,339
26,657,711
22,252,451
23,337,330 25,287,396
Total frozen food products Others
620,055
8,863,915 9,254,726
8,426,642 5,803,868
8,642,368 10,406,259
Real estate - KSA
36,077 43,599
4,986,982 5,631,303
Total other activities revenues
36,077 43,599
18,118,641
14,230,510
13,629,350 16,037,562
Gross revenues
21,820,943
* All 2016 related figures were reclassified according to IFRS
2-2) Geographical analysis of the Company's and its subsidiary revenues
Below is the Group's consolidated revenue for 2020 compared to the previous year business-wise (edible oils and vegetable ghee, sugar and sweeteners, pasta, seafood, frozen food, retail sector, fast food, and specialty fats), including geographical analysis based on availability of brands and products in countries:
Consolidated intercompany elimination Total revenues
(414,519) 21,406,424
Breakdown of sector and main Group activity contributions to 2020 consolidated revenues
Business line/country
Edible oil and vegetable ghee KSA, GCC and Yemen
Egypt, Levant
Central Asia Sudan Morocco
Retail 52.54%
Edible Oil and Vegetable Ghee 25.04%
Turkey Algeria
Sugar and Sweeteners 10.54%
Fast Food 4.87%
Total edible oil and vegetable ghee revenues
52.54%
Frozen Food 3.33%
Sugar and sweeteners
Pasta 2.43%
KSA, GCC and Yemen Egypt
Specialty Fats 0.79%
Others 0.16%
Total sugar and sweeteners revenues
Seafood 0.18%
Total pasta products - Egypt
Baked Food 0.13%
Total seafood products - GCC and Egypt
Total baked food products - Central Asia
Revenues
2-3) Statement of any material differences in the operational results compared to the preceding year's results
Total specialty fats and margarine - KSA and Turkey
Total foods revenues Retail
KSA Egypt
Total retail revenues Fast food
Fast food and restaurants
Declaration: The Company did not announce any financial expectations during 2020
Total fast food and restaurants Frozen food products
2020 | 2019 | Variance (+) or (-) | ||
Income statement | (SAR '000s) | (SAR '000s) | (SAR '000s) | Variance % |
Revenues | 21,701,941 | 21,406,424 | 295,517 | 1.4% |
Cost of revenues | (17,061,558) | (16,902,120) | (159,438) | 0.9% |
Gross profit | 4,640,383 | 4,504,304 | 136,079 | 3% |
Operational revenues - Other | 704,148 | 639,357 | 64,791 | 10.1% |
Operational expenses - Other | (3,683,707) | (3,834,704) | 150,997 | -3.9% |
Operational profit | 1,660,824 | 1,308,957 | 351,867 | 26.9% |
2) Consolidated Performance of the Group continued
2-3) Statement of any material differences in the operational results compared to the preceding year's results continued
The reasons for the change in net profit for 2020 compared to last year:
The increase in the net profit for the year 2020 compared to the net profit recorded last year is mainly attributed to the higher gross profits due to higher sales and margins; higher share of profits from associates; lower operating expenses; and lower net finance cost. The net profit for the year 2020 was achieved despite of the higher zakat and tax expense; and the decrease in the zakat and tax provision reversal relating to prior years' assessments of subsidiaries that was recorded in the prior year.
No.
Borrowing companyLender
Loan periodDate issued
OriginalAmount paid in 2020
3.
Afia - KSA Afia - EgyptSamba Financial Group Emirates NBD
5 years
Dec-20
5 years
Jan-16
2-4) Details of long and short-term loans and payment status
National Bank of Kuwait**
5 years
Jan-19
150,000 11,386 16,000
-
9,470
-
Savola has a long-standing policy to adopt Shariah-compliant financial transactions whenever possible. Accordingly, all Group loans and deposits within Saudi Arabia are Shariah-compliant, as well as some arranged by overseas subsidiaries.
Afia International Co.
4.
In January 2013, the Group completed its initial offering by issuing Sukuk with a total value of SAR 1.5 billion with a tenure of 7 years. The Sukuk matured in January 2020 and accordingly has been classified as short-term loans and borrowings as at December 2019. In July 2019, the Group completed the offering of its new Sukuk, under the new program, with a total value of SAR 1 billion with a tenure of 7 years, which will mature in July 2026. The issuance included SAR 507 million of the previous Sukuk, which was redeemed and exchanged. Accordingly, the nominal value of the previous Sukuk decreased from SAR 1.5 billion to SAR 993 million. Certain loans arranged by overseas subsidiaries are subject to structure and policies adopted in those countries, which may differ from those in Saudi Arabia.
El Maleka for Food IndustriesNational Bank of Kuwait
5.3 years
Dec-18
28,173
987
Pasta
5.
USC
ASC EgyptSamba Financial Group Commercial International Bank***
5 years
Dec-20
13 years
Mar-10
Finance charges for Group loans (short-term and long-term borrowings) from various commercial banks and financial institutions during 2020 (at prevailing market rates) reached SAR 279 million compared to SAR 429 million in the previous year. With regards to loan guarantees granted by the Group to its subsidiaries (see table below), the Group usually signs promissory notes as a guarantee to its own loans and a corporate guarantee for some of its subsidiaries' loans, according to the requirements of the lending banks or financial institutions.
Commercial International
5 years
Jan-19
150,000 529,937 18,969
- -
Bank ****
6.
AUCRNational Bank of Kuwait
4 years
Jan-18
27,473
3,479
Savola Industrial Investment Co.
7.
IFI
Saudi British Bank
4.75 years
Nov-15
170,000
31,875
Details of long-term and short-term loans of the Group and its subsidiaries obtained in the normal course of business are as follows: a) Long-term loans of the Group and its subsidiaries, and their payment status as of 31 December 2020 (SAR '000s):
International Foods Industries Co.
8.
Herfy
Al Rajhi Bank
4-6 years
No.
Borrowing companyLender
Loan periodDate issuedOriginal amountAmount paid in 2020
2014- 2017
499,996
46,003
Balance Dec 2020
Balance Dec 2019
1.
Savola Group
National Commercial Bank
5 years
Oct-16
500,000
125,000
93,750
218,750
Saudi Industrial Development Fund
6 years
2013- 2016
42,903
13,988
Saudi British Bank
3 years
Jan-18
15,600
3,935
Gulf International Bank
2.08 years
Dec-18
Gulf International Bank
3 years
Dec-20
Gulf International Bank
3 years
Dec-20
Samba Financial Group
7 years
Dec-18
480,000 300,000 150,000 294,000
480,000
-
480,000
Saudi British Bank *****
3 years
Oct-19
70,000
-
- -
42,000
300,000 150,000 210,000
- -
252,000
Bank Al Jazira Bank Al Jazira*
7 years 7 years
Nov-18
Dec-19
300,000 500,000
50,000
-
250,000 500,000
300,000 350,000
* Approved facility is SAR 500 million, first drawdown was SAR 350 million in December 2019 and second drawdown was SAR 150 million in January 2020 ** December 2020 loan value changed due to currency effect *** December 2020 loan balance increased due to the addition of the other CIB loan ( **** ) balance of SAR 20,728,000 and due to currency effect.
Bank Al Jazira
2 years
Dec-20
Saudi British Bank
5 years
Sep-18
Saudi British Bank
7 years
Feb-19
Saudi Investment Bank
7 years
Jan-20
300,000 750,000 800,000 300,000
-
150,000 66,000
-
300,000 450,000 693,000 300,000
-
600,000 759,000
**** Loan was closed and December 2019 loan balance added to the other CIB loan (***). ***** December 2019 loan balance reclassified to short-term borrowing in 2020.
b) Short-term loans of the Group and its subsidiaries, and their payment status as of 31 December 2020 (SAR '000s):
-
Balance
Al Rajhi Bank
2 years
Dec-20
200,000
-
200,000
-
NoBorrowing company
Lender
Loan periodDate issued
Dec 2020
Sukuk
Sukuk
7 years 7 years
Jan-13
Jul-19
1,500,000 1,000,000
993,000
-
-
1,000,000
993,000 1,000,000
1
Savola Group Co.
Samba Financial Group First Abu Dhabi Bank
1 month 1 month
Dec-20
Dec-20
120,000 50,000
Savola Group
170,000
Savola Group
4,446,750
4,952,750
2
Afia International Co.
Saudi British Bank
1 month
Dec-20
230,000
2.
PandaSaudi British Bank
5 years
Dec-15
300,000
75,000
-
75,000
Saudi British Bank
6 years
Dec-16
400,000
160,000
-
160,000
Panda Retail Co.
-235,000
3
Afia Intl. Co. - EgyptNational Commercial Bank Samba Financial Group Emirates NBD
National Bank of Kuwait
1 month 1 month 1 year 1 year
Dec-20
Dec-20
Jan-20
Jan-20
265,000 150,000 27,110 15,705
Balance | Balance | |
Dec 2020 | Dec 2019 | |
150,000 | - | |
- | 9,470 | |
17,378 | 15,993 | |
167,378 | 25,463 | |
23,600 | 24,587 | |
23,600 | 24,587 | |
150,000 | - | |
162,835 | 137,280 | |
- | 20,782 | |
11,507 | 14,986 | |
324,342 | 173,048 | |
- | 31,875 | |
- | 31,875 | |
47,687 | 93,690 | |
3,642 | 17,630 | |
9,769 | 13,704 | |
- | 70,280 | |
Herfy Food Services Company | 61,098 | 195,304 |
Total long-term loans | 5,023,168 | 5,638,027 |
Balance | ||
Dec 2019 | ||
- |
2) Consolidated Performance of the Group continued
2-4) Details of long and short-term loans and payment status continued
NoBorrowing company
Lender
Loan periodDate issuedBalance Dec 2020
Balance Dec 2019
NoBorrowing company
Lender
Loan periodDate issuedBalance Dec 2020
Balance Dec 2019
Hongkong and Shanghai Banking Corp.
1 year
Jan-20
27,872
Attijari Wafa Bank Arab Bank
3 months 3 months
Nov-20
Dec-20
15,240 19,008
First Abu Dhabi Bank National Bank of Egypt
1 year
Jan-20
1 year
Jan-20
Egyptian Saudi Finance Bank (El Baraka Bank)
1 year
Jan-20
23,137 21,081 13,900
9
Savola Edible Oils (Sudan) Ltd.
4
Behshahr Industrial Co.
Bank Mellat Karafarin Bank Bank Pasargad Middle East Bank Saman Bank Pirouzan Exchange
3 months
Nov-20
9,941
3 months
Nov-20
26,760
3 months
Oct-20
7,433
3 months
Nov-20
19,327
3 months
Nov-20
7,433
1 year
Jun-20
17,819
5
Savola Gida Sanayi ve Ticaret AS
Hongkong and Shanghai Banking Corp.
6 months
Nov-20
4,197
Hongkong and Shanghai Banking Corp.
1 year
Aug-20
10,820
Hongkong and Shanghai Banking Corp.
1 year
Aug-20
4,437
Hongkong and Shanghai Banking Corp.
6 months
Dec-20
5,459
Arab Bank Attijari Wafa Bank Bank of Khartoum Bank of Khartoum Bank of Khartoum Bank of Khartoum Bank of Khartoum Arab Sudanese Bank Bank of Khartoum National Bank of Egypt National Bank of Egypt National Bank of Egypt National Bank of Egypt Omdurman National Bank Omdurman National Bank Omdurman National Bank
3 months
Dec-20
12,962
3 months
Dec-20
3,956
9 months
Nov-20
1,376
9 months
Oct-20
1,783
9 months
Sep-20
1,432
9 months
Apr-20
594
9 months
May-20
291
9 months
Jun-20
218
9 months
May-20
664
9 months
Jun-20
290
9 months
Aug-20
415
9 months 9 months
Sep-20
Dec-20
274 223
9 months 9 months
Jun-20
Jul-20
354 719
9 months
Jul-20
596
Garanti Investment Credit Ziraat Bank
3 months 6 months
Aug-20
Nov-20
35,454 25,543
Savola Foods Emerging Co.
234,645
297,004
10
European Bank for Reconstruction & Development
6 months
Sep-20
19,349
El Maleka For food Industries Co.
Emirates NBD
18 months
Jan-20
3,294
National Bank of Kuwait
18 months
Jan-20
11,601
Hongkong and Shanghai Banking Corp.
6 months
Jul-20
3,379
Export Development Bank of Egypt (EBE)
18 months
Jan-20
5
Hongkong and Shanghai Banking Corp.
6 months
Jul-20
3,980
Pasta
14,900 49,386
11
United Sugar Co.
European Bank for Reconstruction & Development
6 months
Sep-20
45,750
Hongkong and Shanghai Banking Corp.
3 months
Jan-20
76
12
Alexandria Sugar Co.
Saudi British Bank National Commercial Bank Commercial International Bank
1 month
Dec-20
1 month
Dec-20
1 month
Dec-20
40,000 30,000 21,348
Yapi ve Kredi Bankasi VakifBank
6 months
Sep-20
5,109
Hongkong and Shanghai Banking Corp.
1 year
Jan-20
77,270
Hongkong and Shanghai Banking Corp.
6 months 6 months
Jul-20
Jul-20
18,902 5,106
13
Alexandria United Co. for Land Reclamation
National Bank of Kuwait
1 month
Dec-20
6,241
National Bank of Kuwait
1 year
Jan-20
11,855
Hongkong and Shanghai Banking Corp.
6 months
Sep-20
8,006
Savola Industrial Investment Co.
186,714 306,051
14
Hongkong and Shanghai Banking Corp.
6 months
Sep-20
9,376
Seafood International Two FZCO
Hongkong and Shanghai Banking Corp.
1 year
Jan-20
28,125
Seafood International Two FZCO
28,125 5,625
Hongkong and Shanghai Banking Corp.
1 year
Nov-20
11,780
15
Sahar Enterprises LLC
Dubai Islamic Bank
3-4 monthsDec-20
575
Afia International Co.
1,079,241
1,206,227
National Bank of Fujairah
3-4 monthsDec-20
1,311
6
Afia International Distribution & Marketing Co.
Saudi British Bank
1 month
Dec-20
40,000
Afia International Distribution and Marketing Co.
40,000
-
7
Afia Intl. Co. - Algeria
Arab Bank Fransabank El Djazair
6 months 6 months
Dec-20
Dec-20
63,935 34,717
Habib Bank AG Zurich First Abu Dhabi Bank Standard Chartered Bank
3-4 months 3-4 months 3-4 months
Dec-20
Dec-20
Dec-20
10,551 2,447 8,064
Hongkong and Shanghai Banking Corp.
6 months
Nov-20
51,710
Hongkong and Shanghai Banking Corp.
3-4 monthsDec-20
296
Good Food Co.
23,244 42,175
8
Savola Morocco Co.
Credit du Maroc
6 months
Sep-20
23,888
16
Herfy Food Services Co.
Saudi British Bank
8 months
Apr-20
30,000
NoBorrowing company
Lender
Loan periodDate issuedBalance Dec 2020
Balance Dec 2019
Saudi British Bank *
3 years
Oct-19 70,279
Herfy Food Services Co. 100,279
-Total short-term loans
1,877,148
1,906,468
* Reclassified from long-term loans
2-5) Summary of payments made and due to the government (in SAR '000s)
In developing the ERM framework, the focus was to design a process that addresses Savola's business needs while remaining simple and pragmatic. Savola ERM framework outlines the series of activities that Savola will use in identifying, assessing and managing its risks. The framework ensures that risk is being managed through a common set of processes at Savola, which enable the flow of risk information to the person with the authority and responsibility for making decisions pertaining to the activity associated with the risk. By establishing a common language and set of tools, Savola's risk management process can be replicated at any level within the Group.
In line with the continuous efforts to strengthen risk management culture and capabilities, Savola has:
1.
2.
Customs duties Zakat
130,612 91,038
7,060 23,458
- -
3.
Income tax and withholding tax
74,327
49,299
Income and withholding tax
4.
GOSI (for KSA) and social insurance (for outside KSA)
129,725
12,838
Employees' GOSI and social insurance
According to the requirements of the laws and applicable regulations
• Established a dedicated risk management function at the Group and its main subsidiaries. The function comprises a dedicated team leading the risk management activities at enterprise level, as well as assigned risk champions who implement risk management activities within respective business units/ functions.
• Developed a risk management framework and governance policy, approved by the Board of Directors.
• Launched WAEI risk guide program as part of promoting its risk management culture.
5.
Visas and passport office fees
47,889
664
Iqama renewal, exit and re-entry visas
• Conducted multiple risk awareness sessions across the Group and its subsidiaries.
• Conducted a risk assessment for various key functions at the Group and its main subsidiaries
6.
Labor office fees
7.
Other duties and government levies
130,169 35,843
477 8,647
Work permits and Iqama renewal
• Embarked on a risk assessment project for key operating units of its subsidiary, Savola Foods.
• Proactively identified emerging external risks and communicated them with the relative functions for assessment.
License fees and other fees
3) Potential risks to Savola Group Operations 3-1) Savola Risk Management approach a) Risk Management overview
• A Governance, Risk and Compliance (GRC) system has been implemented to effectively enhance managing risk assessments and registers, management issues, key risk indicators, policy management, and internal audit at Savola Group and its main subsidiaries; Savola Foods and Panda, autonomously.
c) Channels to communicate, decline and enforce the risk culture
The Group, like any other economic entity, may be affected by risks through the nature of its commercial activities in basic food commodities, retail and other investments. These risks may be summarized in the possibility of the Group operations being exposed to geopolitical risks that result from its operations outside the Kingdom, as well as fluctuations in raw material prices, currencies, speculation and unfair price competition in the local and international markets where it operates. There are also economic and political risks in the countries where it operates and risks pertaining to new markets in the region, in line with the Group's geographic expansion strategy.
• Three lines of Defense
Savola operates a "Three Lines of Defense" model to ensure accountability across the Group for governance, monitoring, reporting and management of risks, and the control environment.
Each of the Three Lines of Defense plays a distinct role within Savola's wider governance framework. The Board and senior management are the primary stakeholders served by the Three Lines of Defense model, and they are the parties best positioned to help in ensuring that the Three Lines of Defense are reflected in Savola's risk management and internal control processes.
Further risks include: fluctuation in foreign currency, exchange rates against the Saudi Riyal or other currencies of the countries that the Group operates in and inflation in the economies of countries where the Group operates; risks related to entering into new investments; and risks that might be associated with the current economic conditions and political situation in countries where the Group operates or exports its products.
The Group faces other risks from its various investment shareholdings in different companies and funds, locally and internationally.
The Group and its subsidiaries manage these risks through its Board of Directors, Audit Committee, Executive Management and various departments and task forces within the Group. The Group is focused on continuously developing and improving a sound risk management system across the Group. It has established a dedicated Risk Management department at holding level and its major subsidiary i.e. SFC and Panda.
Savola seeks to protect its stakeholders, reputation and the value of its assets, and is committed to continually developing its risk management culture by way of its risk governance framework and continual team development.
tiduAlanretxE
Regulator
b) Enterprise Risk Management framework
Savola has developed - in line with the market best practices - an integrated Enterprise Risk Management (ERM) framework to support the success of the business and achievement of its strategic goals through a collaborative risk management environment that proactively identifies, monitors and mitigates risks. The framework has been developed in line with current leading ERM practices and ISO 31000.
No. Item (payments) PaidDue until the end of the financial period but not paid Description | Reasons/ Justifications |
Subsidiaries, Boards and
CommitteesBoard of Directors
The companies' committees (Audit, RNC, and Investment)
(vision, strategic planning, performance monitoring)General Assembly (Institutionalization and oversight)
• | Organizational structure | • |
• | Planning and making the right | • |
decisions | • | |
• | Policies and procedures | • |
• | Execution | • |
• | Assessment | |
• |
Monitoring
Offering the necessary support Authority definition Independence of the reports Compliance with rules and regulations and code of conduct
Reports to regulators
•
•
Great independency Objectivity
• Audit work (financial, risk and other activities)
3) Potential risks to Savola Group Operations continued 3-1) Savola Risk Management approach continued
• Promoting Risk Management Culture - WAEI
c) Market risk
In its continuing efforts to promote a risk management culture, enhance corporate excellence and bolster internal controls, Savola has launched WAEI, which is a:
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk.
• Modern method to share the knowledge of already identified and known business-related risks.
• Initiative to reflect, explore and identify those risks that Savola may not fully be aware of or understand today.
c-1) Interest rate risk
• Program that brings together people and expertise from across the Group to assess potential risks that Savola may face in the future.
Interest rate risks are the exposures to various risks associated with the effect of fluctuations in the prevailing interest rates on the Group's financial positions and cash flows.
• Opportunity to review how Savola is currently managing risks and to reflect on the best and most cost-efficient ways of managing risks on a sustainable basis.
The Group's interest rate risks arise mainly from its borrowings and short-term deposits, which are at floating rate of interest and are subject to re-pricing on a regular basis and for which the management closely monitors the changes in interest rates.
d) COVID-19 and Risk Management role
c-2) Currency risk
The Risk Management department at the Group had an effective role during the pandemic and the risks arising from it. Several risk types had been proactively identified early on and were subjective to evaluation as per the enterprise risk management framework. As a result, a mitigation plan has been put in place with active monitoring by risk management to ensure its execution and effectiveness. In summary, risk management role mainly involved the following:
• Identification of risks related to the pandemic and sharing them with the respective departments for processing.
• Contributing to risk mitigation plans and responses along with following up on them.
• Contributing to forming crisis management committees and taskforces related to the pandemic while holding a membership to support and advise.
Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates for its transactions principally in Saudi Riyals, US Dollars, Iranian Riyals, Egyptian Pounds, United Arab Emirates Dirhams, Sudanese Pounds and Turkish Lira. The Group operates internationally and is exposed to foreign exchange risk. The Group's investments in foreign subsidiaries and associates, whose net assets are exposed to currency translation risk. Currently, such exposures are mainly related to exchange rate movements between foreign currencies against Iranian Riyals, Egyptian Pounds, Sudanese Pounds and Turkish Lira. Such fluctuations are recorded as a separate component of equity "Foreign Currency Translation Reserve" in the accompanying consolidated financial statements. The Group's management monitors such fluctuations and manages its effect on the consolidated financial statements accordingly.
• Periodic and frequent reporting of the pandemic activities to the Board of Directors
3-2) Financial instruments and risk management a) Financial Risk Management
Generally, borrowings are denominated in currencies that match the cash flows generated by the underlying operations of the Group. In addition, interest on borrowings is denominated in the currency of the borrowings. This provides an economic hedge without derivatives being entered into and therefore hedge accounting is not applied in these circumstances.
The Group's activities expose it to a variety of financial risks: market risk (including currency risk, fair value and cash flow interest rate risks and price risk), credit risk and liquidity risk. The Group's overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Group's financial performance. The Group uses derivative financial instruments to hedge certain risk exposures.
d) Price risk
b) Risk management framework
Risk management is carried out by senior management under policies approved by the Board of Directors. Senior management identifies, evaluates and hedges financial risks in close co-operation with the Group's operating units. The most important types of risk are market risk, credit risk and liquidity risk.
The risk that the value of a financial instrument will fluctuate as a result of changes in market prices, whether those changes are caused by factors specific to the individual instrument or its issuer or factors affecting all instruments traded in the market. The Group is exposed to equity securities price risk since the Group holds investment in certain listed equities which are classified on the statement of financial position as FVOCI investments. The management of the Group monitors the proportion of equity securities in its investment portfolio based on market indices. Such investments are managed on an individual basis and all buy and sell decisions are approved by the Investment Committee. In addition, United Sugar Company uses derivative financial instruments (Commodity future contracts) to hedge its price risk of raw material in the Sugar business.
e) Credit risk
The Board of Directors has overall responsibility for establishment and oversight of the Group's risk management framework. The executive management team is responsible for developing and monitoring the Group's risk management policies. The team regularly meets, and any changes and compliance issues are reported to the Board of Directors through the audit committee.
Risk management systems are reviewed regularly by the executive management team to reflect changes in market conditions and the Group's activities. The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.
The audit committee oversees compliance by management with the Group's risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group.
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Group has no significant concentration of credit risk. To reduce exposure to credit risk, the Group has an approval process whereby credit limits are applied to its customers. The management also regularly monitors the credit exposure towards the customers whereby the customers are grouped according to their credit characteristics, payment history, whether they are an individual or a legal entity, whether they are a wholesale/retail or manufacturers, their geographic location, existence of any financial/ economic difficulties including the default risk associated with the industry and country in which they operate and accordingly records impairment loss against those balances considered doubtful of recovery. Outstanding customer receivables are regularly monitored. In order to cater the credit risk from debtors, the Group has also entered into insurance arrangements in certain geographies.
f) Liquidity risk
Financial instruments carried on the consolidated statement of financial position include cash and cash equivalents, trade and other receivables, investments, long term receivables, borrowings, lease liabilities, derivatives, accounts payable and accrued and other current liabilities. The particular recognition methods adopted are disclosed in the individual policy statements associated with each item.
Liquidity risk is the risk that an enterprise will encounter difficulty in raising funds to meet commitments associated with financial instruments. Liquidity risk may result from an inability to sell a financial asset quickly at an amount close to its fair value. Liquidity risk is managed by monitoring on a regular basis that sufficient funds are available through committed credit facilities to meet any future commitments.
Financial asset and liability is offset and net amounts reported in the financial statements, when the Group has a legally enforceable right to set off the recognized amounts and intends either to settle on a net basis, or to realize the asset and liability simultaneously.
g) Fair value of assets and liabilities
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or, in its absence, the most advantageous market to which the Group has access at that date. The fair value of a liability reflects its non-performance risk. A number of the Group's accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities. For further details, the same item can be reviewed in the clarification notes accompanying the Company's financial statements for 2020.
Corporate Governance Report and Major Relevant Disclosures
Organization structure:
a) Composition of the Board and members classification a-1) Summary of the role and responsibilities of the Board of Directors:
The Board of Directors is the highest authoritative body responsible to shareholders for managing the Company in accordance with its bylaws, laws and relevant regulations. The main roles of the Board of Directors include setting overall corporate strategies, plans, policies and main objectives of the Company, establishing and reviewing internal control measures, corporate governance, ensuring proper mechanisms to manage risks and ensuring the effectiveness of internal controls across the Group. The Board approves financial budgets, statements, and monitors the performance of the Group and Executive Management's performance. The Board protects the interests of its shareholders and other relevant parties including approving policies that ensure the application, supervision and execution of the laws and regulations, and commits to disclose any key information related to the Company and its performance that may assist shareholders in evaluating its assets and liabilities. The detailed role of the Board, which has been articulated in the bylaws and Corporate Governance Manual, is available on the Company's website (www.savola.com).
a-2) Composition of the Board and members classification:
The Company's bylaws have set the number of members of the Board of Directors to be 11 members, which is in line with the Companies' Law and Corporate Governance Regulations issued by the CMA. Accordingly, the Board was elected by the AGM held on 8 May 2019 for the current term that started 1 July 2019 for the period of 3 years ending 30 June 2022. All the elected members are either Non-Executive or Independent (to review the qualifications, experience of the members and their classification please refer to the beginning of this Report).
a-3) Names of the companies, whatever their legal forms are, inside and outside the Kingdom, which a Board member is a member of their current or previous board or manager in:
The below statement/schedule includes the names of the companies, whatever their legal forms are, inside and outside the Kingdom, in which a Board member is a member or manager of their current or previous board:
No.
Board member name
Names of the companies in which the member of the Board of Directors is a director or manager of its current board of directorsInside the Kingdom/ outside the KingdomLegal entity (listed/ unlisted/ limited liability)
Names of the companies in which the member of the Board of Directors was a director or manager of its previous board of directors
Inside the Kingdom/ outside the KingdomLegal entity (listed/ unlisted/ limited liability)
1.
Mr. Sulaiman Abdulkadir Al Muhaidib
Savola Group
InsideListed
Saudi British Bank
InsideListed
Almarai Co.
InsideListed
Nationals Industrialization Co.
InsideListed
Abdulkadir Al Muhaidib & Sons Co.
Inside
Unlisted
Middle East Paper Co.
InsideListed
Rafal Real Estate Development Co.
Inside
Unlisted
Joussour Holding Co.
Inside
Unlisted
Al Muhaidib Holding Co.
InsideLimited Liability
United Mining Industries Co.
Inside
UnlistedEssam Abdulkadir Al Muhaidib & Partners Co.
InsideLimited Liability
Al Oula Real Estate Development Co.
Inside
Unlisted
Amwal Al Ajial Holding Company
InsideLimited Liability
Thabat Construction Co.
InsideLimited Liability
International Co. for Water and Energy Development (Acwa)
InsideLimited Liability
Architectural Supplies Works Co.
InsideLimited Liability
Vision Invest Holding Co.
InsideLimited Liability
International Timber Co.
InsideLimited Liability
Consolidated Business UnitsNon-Consolidated InvestmentsOther Non-Consolidated Investments
Zat Al Sawary Co.
InsideLimited Liability
Mayar Foods Co.
InsideLimited Liability
a-3) Names of the companies, whatever their legal forms are, inside and outside the Kingdom, which a Board member is a member of their current or previous board or manager in: continued
No.
Board member name
Names of the companies in which the member of the Board of Directors is a director or manager of its current board of directorsInside the Kingdom/ outside the KingdomLegal entity (listed/ unlisted/ limited liability)
Names of the companies in which the member of the Board of Directors was a director or manager of its previous board of directors
Inside the Kingdom/ outside the KingdomLegal entity (listed/ unlisted/ limited liability)
No.
Board member name
Names of the companies in which the member of the Board of Directors is a director or manager of its current board of directorsInside the Kingdom/ outside the KingdomLegal entity (listed/ unlisted/ limited liability)
Names of the companies in which the member of the Board of Directors was a director or manager of its previous board of directors
Inside the Kingdom/ outside the KingdomLegal entity (listed/ unlisted/ limited liability)
Taj Al Awfia Co.
InsideLimited Liability
Mayar Transport & Warehousing Co.
InsideLimited Liability
Afia International Co.
Inside
United Sugar Co.
Inside
Unlisted Unlisted
Tarabot Investment & Development
InsideLimited Liability
Gulf Marasy for Marine Services Co.
InsideLimited Liability
Afia International Co. Egypt
OutsideUnlisted
Al Shamiyah Urban Development Co. Ltd.
InsideLimited Liability
Citadel Trading & Contracting Co
InsideLimited Liability
United Sugar Co. Egypt
Arabian Safenat for Construction Co.
InsideLimited Liability
Al Muhaidib for Development Co.
InsideLimited Liability
Alexandria Sugar Co. Egypt
Outside OutsideUnlisted Unlisted
Al Muhaidib Land Transport
InsideLimited Liability
El Maleka for Food Industries Co.
OutsideUnlistedSulaiman Abdulkadir Al Muhaidib & Partners Co.
InsideLimited Liability
Savola Gida
OutsideUnlisted
3.
Emad Abdulkadir Al Muhaidib & Partners Co.
InsideLimited Liability
Mr. Essam Abdulkadir Al Muhaidib
Savola Group
InsideListed
Emaar Middle East Co.
InsideLimited Liability
Awatef Abdulkadir Al Muhaidib & Partners Co.
InsideLimited Liability
Herfy Food Services Co.
InsideListed
Zohoor Alreef Trading Co.
Inside
UnlistedMaryam Abdulkadir Al Muhaidib & Partners Co.
InsideLimited Liability
Bawan Co.
InsideListed
Al Yamamah Steel Industries Co.
Inside
UnlistedTamader Abdulkadir Al Muhaidib & Partners Co.
InsideLimited Liability
Abdulkadir Al Muhaidib & Sons Co.
Inside
Unlisted
Thabat Construction Co.
Inside
LimitedLimited Liability
Haifa Abdulkadir Al Muhaidib & Partners Co.
InsideLimited Liability
Shamia Real Estate Development Co.
InsideLimited Liability
Middle East Paper Co. (MEPCO)
InsideListed
Loloah Sulaiman Almudaiheem & Partner Co.
InsideLimited Liability
Rafal Real Estate Co.
Inside
Unlisted
Emdad Human Resources & Manpower Supply Co.
Inside
UnlistedMuhail for Operation and Maintenance Co.
InsideLimited Liability
National Housing "Al wataniyah Al eskan" Co.
Inside
Unlisted
Al Salam Bank BahrainOutside
Listed
United Feed Manufacturing Co.
InsideLimited Liability
Panda Retail Co.
Inside
Unlisted
Nesaj Real Estate Development Co.
InsideLimited Liability
Amwal Al Khaleej for Commercial Investment Co.
InsideLimited Liability with GCC capital
Safenat Arabian Contracting Company
InsideLimited Liability
Al Latifia Trading & Contracting Co.
InsideLimited Liability
Al Muhaidib Holding
Inside
Unlisted
2.
Mr. Bader Abdullah Al Issa
Savola Group
InsideListed
Knowledge Economic City Co.
InsideListed
Amwal Al Khaleej for Commercial Investment Co.
InsideLimited Liability
That Al Sawary Co. Romansiah Co. Limited
InsideLimited Liability
Inside
UnlistedAlbalad Al Amin Co. Rafal Real Estate Co.
Inside
Inside
Unlisted UnlistedBanque Saudi Fransi
InsideListed
Kinan International Real Estate Development Co.
Inside
Unlisted
Tharwa City for Real Estate Co.
Inside
Unlisted
Al Oula for Real Estate Development Co.
Inside
UnlistedDur Hospitality
InsideListed
Al Aqeeq Real Estate Development Co.
Inside
Unlisted
Vision Invest Holding Co.
Inside
Unlisted
International Timber Co.
Inside
UnlistedAlmarai Co.
InsideListed
Sukoon InternationalInside
Unlisted
Nokhbat Alkwader Co.
InsideLimited Liability
Bloom Invest Co.
InsideLimited Liability
Savola Foods Co.
Inside
Unlisted
Savola Packaging Systems Co.
Inside
Unlisted
Jadeer Investment Holding Co.
InsideLimited Liability
Saudi Tabreed Co.
InsideLimited Liability
Panda Retail Co.
Inside
Unlisted
Assila Investments Co.
Inside
Unlisted
a-3) Names of the companies, whatever their legal forms are, inside and outside the Kingdom, which a Board member is a member of their current or previous board or manager in: continued
No.
Board member name
Names of the companies in which the member of the Board of Directors is a director or manager of its current board of directorsInside the Kingdom/ outside the KingdomLegal entity (listed/ unlisted/ limited liability)
Names of the companies in which the member of the Board of Directors was a director or manager of its previous board of directors
Inside the Kingdom/ outside the KingdomLegal entity (listed/ unlisted/ limited liability)
No.
Board member name
Names of the companies in which the member of the Board of Directors is a director or manager of its current board of directorsInside the Kingdom/ outside the KingdomLegal entity (listed/ unlisted/ limited liability)
Names of the companies in which the member of the Board of Directors was a director or manager of its previous board of directors
Inside the Kingdom/ outside the KingdomLegal entity (listed/ unlisted/ limited liability)
Ekseer Alkhaleej Contracting Co.
InsideLimited Liability
Sulaiman Abdulkadir Al Muhaidib & Partners Co.
InsideLimited Liability
4.
Mr. Abulaziz Khaled
Savola Group
InsideListed
Herfy Food Services Co.
InsideListed
Al Ghufaily
Buhairat Alkhobar Real Estate Development Co.
InsideLimited Liability
Emad Abdulkadir Al Muhaidib Co.
InsideLimited Liability
Alrajhi Bank
InsideListed
Tabuk Agriculture Development Co.
InsideListed
Mayar Foods Co.
InsideLimited Liability
Awatf Abdulkadir Al Muhaidib & Partners Co.
InsideLimited Liability
Al Rajhi Capital
Inside
Unlisted
National Medical Care Co.
InsideListed
Atheel Holding Co.
InsideLimited Liability
Maryam Abdulkadir Al Muhaidib & Partners Co.
InsideLimited Liability
Savola Foods Co.
Inside
Unlisted
The Industrialization & Energy Services Co.
Inside
Unlisted
Spring Water Factory Co.
InsideLimited Liability
Ltd.
Hayfa Abdulkadir Al Muhaidib Co.
InsideLimited Liability
Riyadh Hotels & Entertainment Co.
Inside
Unlisted
Saudi Tharwa for Real Estate Investment & Development Co.
InsideLimited Liability
Lolwah Sulaiman Almudaiheem & Partners
InsideLimited LiabilitySaudi Industries Development Co.
Inside
Unlisted
Atheel Arabia for Services Co. Limited
InsideLimited Liability
Himmah Logistics Co.
InsideLimited Liability
Panda Retail Co.
Inside
Unlisted
5.
Amwal Al Ajyal Holding Co.
InsideLimited Liability
Muhail for Operation and Maintenance Co.
InsideLimited Liability
Eng. Mutaz Qusai Alazawi
Savola Group
InsideListed
Merrill Lynch Kingdom of Saudi Arabia
Inside
UnlistedHerfy Food Services Co.
InsideListed
Qalaa Trading & Contracting Co.
InsideLimited Liability
Tamader Abdulkadir Al Muhaidib Co.
InsideLimited Liability
Rivers Water Factory Co.
InsideLimited Liability
Ltd.
International Co.for Water and Energy Development (Acwa)
Inside
UnlistedArabian Cement Co. Riyad Bank
InsideListed
Inside
Listed
Etihad Etisalat (Mobily)
InsideListed
Essam Abdulkadir Al Muhaidib & Partners Co.
InsideLimited Liability
Al Jadeer Logistics Services
InsideLimited Liability
Ready Mix Concrete & Construction Supplies Ltd.
Outside
Listed
Nestle Water Factory Co.
InsideLimited Liability
Ltd.
Masdar Building Materials Co.
Inside
Unlisted
Savola Foods Co. United Sugar Co.
Inside
Inside
Unlisted Unlisted
Taj Al Awfia Co.
InsideLimited Liability
Mayar Transport & Warehousing Co.
InsideLimited Liability
Naqiah Water Factory Limited
InsideLimited Liability
Afia International Co. United Sugar Co. Egypt
Inside
OutsideUnlisted Unlisted
Shaas for Water Services Co.
Inside
UnlistedAlexandria Sugar Co. Egypt
OutsideUnlisted
Tanmiat Al Ahlam for Construction
Inside
UnlistedEl Maleka for Food Industries Co.
OutsideUnlistedQatrana Cement Co.
OutsideUnlisted
Al Manhal Water Services Factory
InsideLimited Liability
Afia International Co. Egypt
OutsideUnlisted
Shaas for Water Services Co. Ltd.
InsideLimited Liability
Saudi Industrial Construction & Engineering Projects Ltd.
InsideLimited Liability
Saudi Technology and Trade Co.
InsideLimited Liability
Al Wusataa for Development
InsideLimited Liability
a-3) Names of the companies, whatever their legal forms are, inside and outside the Kingdom, which a Board member is a member of their current or previous board or manager in: continued
No.
Board member name
Names of the companies in which the member of the Board of Directors is a director or manager of its current board of directorsInside the Kingdom/ outside the KingdomLegal entity (listed/ unlisted/ limited liability)
Names of the companies in which the member of the Board of Directors was a director or manager of its previous board of directors
Inside the Kingdom/ outside the KingdomLegal entity (listed/ unlisted/ limited liability)
No.
Board member name
Names of the companies in which the member of the Board of Directors is a director or manager of its current board of directorsInside the Kingdom/ outside the KingdomLegal entity (listed/ unlisted/ limited liability)
Names of the companies in which the member of the Board of Directors was a director or manager of its previous board of directors
Inside the Kingdom/ outside the KingdomLegal entity (listed/ unlisted/ limited liability)
6.
Mr. Fahad Abdullah Al Kassim
Savola Group
InsideListed
Albilad Bank
InsideListed
7.
Mr. Mohammed Ibrahim Al Issa
Savola Group
InsideListed
Sukoon Real Estate
Inside
UnlistedJarir Marketing Co.
InsideListed
Abdullatif Al Issa Holding Group
Inside
Unlisted
Kinan International for Real Estate Development Co.
Inside
Unlisted
Al Aqeeq Real Estate
Inside
UnlistedDur Hospitality Dallah Health
InsideListed
Naqel Co.
Inside
Unlisted
Assila Investments Co.
Inside
Unlisted
Inside
Listed
Al Rajhi Alpha Investment Holding Co.
Inside
Limited Liability
8.
Mr. Abdulrahman Savola Group Mohammed
InsideListed
Bank Albilad
InsideListed
Ramzi AddasAl Riyadh Development Co.
InsideListed
Raj Real Estate Co.
InsideLimited Liability
Alinma Bank
InsideListed
Al Soraie Industrial & Trading Co.
InsideListed
Fahad Bin Abdullah Al Kassim & Sons Trading & Investment Co.
Inside
Unlisted
National General Automotive Co.
InsideLimited Liability
Diyar Al Khayyal Real Estate Development Co.
Inside
Unlisted
Red Sea Markets Co.
Inside
Ltd.
Limited Liability
Saudi Heritage Hospitality Co.
Inside
Unlisted
Saudi Post
InsideGov.
Tunisian Saudi Bank
Outside
CorporationDr. Mohammed Rashid Al Fagih & Associates
Inside
Unlisted
Joint venture for the Saudi Ministry of Finance
Keppel Alnumu Co.
InsideLimited Liability
Al Rabie Saudi Foods Co.
InsideLimited Liability
Sedco Capital
Inside
Rakeen Najd International Co.
Inside
Unlisted
Ltd.
Limited Liability
Environment Fund
Inside
Gov. EntityAl Rajhi United Investment Holding Co.
Inside
Unlisted
Abdulaziz Al Saghair Holding Co.
InsideLimited Liability
Savola World Foundation
Inside
Alargan Projects Co.
Inside
Fincorp Investment Holding Co.
OutsideUnlisted Unlisted
Non-profit Organization
Quantum Investment Bank
Outside
Limited Liability
Mohammed Abdulaziz Al Habib & Sons Holding Co.
Inside
Unlisted
International Co. for Water and Energy Development (ACWA)
InsideLimited Liability
Ahmed Mohammed Saleh Baeshen & Co.
Inside
Unlisted
Baseqat Al Khaleej Co.
InsideLimited Liability
ARCOMA Co.
Inside
Areez Commercial Investment Co. Ltd.
InsideLimited LiabilityLimited Liability
9.
Abdullah Ibrahim Al Subeaei Holding (AIMS)
InsideLimited Liability
Mr. Rakan Abdulaziz Al Fadl
Savola Group
InsideListed
Al Kassim Fund for Investment and Commercial Development
InsideLimited Liability
Alfadl Group
InsideLimited Liability
Sahara Building Contractors Co.
InsideLimited Liability
Amwal Financial Consultations
InsideLimited Liability
Rabya Co.
InsideLimited Liability
Alfadl Investments Co.
Inside
Limited Liability
Century 21 & Partner for Real Estate Appraisal Co.
InsideProfessional Co.
Alfadl Real Estate Co.
InsideLimited Liability
Fahad Abdullah Al Kassim Auditing Office
InsideProfessional entity
Al Takamul Group Co.
Inside
Holding Co.
Savola World Foundation
Inside
Non-profit Organization
a-3) Names of the companies, whatever their legal forms are, inside and outside the Kingdom, which a Board member is a member of their current or previous board or manager in: continued
No.
Board member name
Names of the companies in which the member of the Board of Directors is a director or manager of its current board of directorsInside the Kingdom/ outside the KingdomLegal entity (listed/ unlisted/ limited liability)
Names of the companies in which the member of the Board of Directors was a director or manager of its previous board of directors
Inside the Kingdom/ outside the KingdomLegal entity (listed/ unlisted/ limited liability)
Member name
Current positions
Previous positions
Qualifications
Experience
Investment Committee members:
1. Eng. Mutaz Qusai Alazawi
10.
Dr. Adnan Abdulfattah Soufi
Savola Group
InsideListed
Bupa Arabia Co.
InsideListed
2. Mr. Abdulaziz Khaled Al Ghufaily
Fitaihi Group Co. Alahli Capital Co. Wadi Jeddah Co.
InsideListed
Inside
Inside
Unlisted UnlistedArabian Cement Co. SEDCO Holding Group Awj Holding Co.
InsideListed
3. Mr. Fahad Abdullah Al Kassim
Their current and previous positions, qualifications and experience were mentioned earlier in this Report
Inside
Unlisted
4. Dr. Adnan Abdulfattah Soufi
Inside
Limited Liability
5. Mr. Mohammed Ibrahim Al IssaPanda Retail Co.
Inside
Unlisted
Saudi Company for Industrial ServicesInsideListed
a-5) Board meetings attendance record:
11.
Mr. Bader Hamad Al Rabiah
Savola Group
InsideListed
In order to enhance its role and responsibilities, the Board held 5 meetings during the year, and due to the precautionary measures to limit the spread of Coronavirus (COVID-19), all meetings were held virtually after March 2020. The below schedule shows the attendance records for each meeting during 2020:
Meetings during 2020
Al Manar Financing and Leasing Co.
Outside
Listed
29 Jan
29 April
16 Sep*
28 Oct
20 DecNo.
MemberNo. of attendance
1. Mr. Sulaiman Abdulkadir Al Muhaidib
√
√
√
√
√
5 of 5
Noor Financial Investment Co.
Outside
Listed
2. Mr. Bader Abdullah Al Issa
√
√
√
√
√
5 of 5
Palms Agro Production Co.
Outside
Listed
3. Mr. Essam Abdulkadir Al Muhaidib
4. Mr. Abdulaziz Khaled Al Ghufaily
√ √
√ √
√ √
√ √
√ √
5 of 5 5 of 5
Meezan Bank
Outside
Listed
5. Eng. Mutaz Qusai Alazawi
√
√
√
√
√
5 of 5
Al Durra National Real Estate Co.
OutsideUnlisted
6. Mr. Fahad Abdullah Al Kassim
Noor Al Salhiya Real Estate Co.
OutsideUnlisted
7. Mr. Mohammed Ibrahim Al Issa
√ √
√ √
√ √
√ √
√ √
5 of 5 5 of 5
8. Mr. Abdulrahman Mohammed Ramzi Addas
√
√
√
√
√
5 of 5
a-4) Summary of Committee members' CVs:
9. Mr. Rakan Abdulaziz Al Fadl
√
√
√
√
√
5 of 5
Member name
Current positions
Previous positions
Qualifications
Experience
10. Dr. Adnan Abdulfattah Soufi
√
√
√
√
√
5 of 5
Remuneration and Nomination Committee members:
11. Mr. Bader Hamad Al Rabiah
√
√
√
√
√
5 of 5
1. Mr. Rakan Abdulaziz
-Mr. Elnour Ali Saad (Board Secretary)
√
√
√
√
√
5 of 5
Al Fadl
2. Mr. Bader Abdullah Al Issa
3. Mr. Essam Abdulkadir Al Muhaidib
Their current and previous positions, qualifications and experience were mentioned earlier in this Report
The last meeting of the General Assembly was held on 29 April 2020 and the attendance records above reflects the attendance of the Board members during the full year before and after the General Assembly.
* The financial results for Q2 2020 were approved by the BOD by circulation based on the Audit Committee recommendation at its meeting held on 12 August 2020.
4. Mr. Abdulrahman Mohammed Ramzi Addas
5. Mr. Johan Brand
Managing Director/ Owner, Johan Brand Leadership Advisory
a-6) Board members attendance record for the General Assembly meeting:
Senior Partner and Consultant, Egon Zehnder (1995-2016);
One meeting of the Shareholders General Assembly was held virtually during the last fiscal year due to the precautionary measures to limit the spread of Coronavirus (COVID-19). The following is a list of the members of the Board of Directors present during the meeting:
Management Institute
No.
Board Member
Position
EGM No. 32 (29 April 2020)No. of meetings attended
1. Mr. Sulaiman Abdulkadir Al Muhaidib
2. Mr. Bader Abdullah Al Issa
3. Mr. Abdulaziz Khaled Al Ghufaily
4. Mr. Essam Abdulkadir Al MuhaidibChairman Vice Chairman Member Member
√ √ √ √
1 of 1
1 of 1
1 of 1
1 of 1
MSc, Busines | Has wide and | |
Economics, Erasmus | independent | |
University Rotterdam, | experience as a | |
DWC-LLC (2016-present) PepsiCo, Director PCI | The Netherlands; MA, | leadership |
Business Law, and MA, | professional, and his | |
(1993-1995) | Private Law, Erasmus | focus is on making |
University Rotterdam, | Boards and C-level | |
The Netherlands; | leadership more | |
Certified Professional | effective. Advisor to | |
Director, Hawkamah/ | Chairmen, Family | |
Mudara Institute of | Heads and CEOs. | |
Directors |
a-6) Board members attendance record for the General Assembly meeting continued
No.
Board Member
PositionEGM No. 32 (29 April 2020)No. of meetings attended
Statement of attendance for Committee meetings held during 2020:
Meetings during 2020
5. Mr. Fahad Abdullah Al Kassim
Member and Chairman of AC
√
1 of 1
No.
Member
28 Jan
28 April
15 Sep
Total
6. Eng. Mutaz Qusai Alazawi
Member and Chairman of IC
√
1 of 1
1.
Mr. Rakan Abdulaziz Al Fadl (Chairman)
7. Mr. Mohammed Ibrahim Al Issa
8. Mr. Abdulrahman Mohammed Ramzi AddasMember Member
√ √
1 of 1 1 of 1
√
√
√
3 of 3
(Independent Savola Board member)
2.
9. Mr. Rakan Abdulaziz Al Fadl
Member and Chairman of RNC
√
1 of 1
Mr. Essam Abdulkadir Al Muhaidib (Non-Executive Savola Board member)
√
√
√
3 of 3
10. Dr. Adnan Abdulfattah Soufi
11. Mr. Bader Hamad Al RabiahMember Member
√ √
1 of 1 1 of 1
3.
Mr. Bader Abdullah Al Issa (Non-Executive Savola Board member)
√
√
√
3 of 3
4.
Mr. Abdulrahman Mohammed Ramzi Addas (Independent Savola Board member)
√
√
√
3 of 3
b) Board Committees: b-1) Remuneration and Nomination Committee:
5.
Mr. Johan Brand
√
√
√
3 of 3
(Independent external member)
• Meetings and role of the Committee:
The Remuneration and Nomination Committee (RNC) consists of 5 members who are Independent and Non-Executive Board members and external experts with experience in the field of the Committee's mandates. The Committee held 3 meetings during 2020, and due to the precautionary measures to limit the spread of Coronavirus (COVID-19) all meetings held after March 2020 were held via video conference. During its meetings the RNC followed up its responsibilities in the field of remuneration, nominations and Corporate Governance. A summary of the main responsibilities of the Committee, statement of its membership and attendance during the year are as follows:
-Mr. Morhaf Mohammed Alsamman (Committee Secretary)
√
√
√
3 of 3
b-2) Investment Committee:
• Meetings and role of the Committee:
• Summary of Committee role, duties and main responsibilities:
The Investment Committee consists of 5 members, all of them are Non-Executive and Independent Board members. The Committee held 7 meetings during 2020 to enhance the role of the Board in following and implementing the strategic plans in relation to investment opportunities. Due to the precautionary measures to limit the spread of Coronavirus (COVID-19)
The Committee shall assume responsibilities related to 3 areas, namely Remuneration, Nomination and Corporate Governance, and will update the Board regularly about its activities. The Committee's duties and responsibilities include:
all meetings held after March 2020 were held virtually. Below is a summary of the Committee's role, responsibilities, membership, and the number of meetings held during 2020:
a) With regards to Remuneration:
• Summary of Committee role, duties and main responsibilities:
Prepare a clear remuneration policy for Board members, its Committees and the Executive Management and clarify the relationship between the paid remuneration and the adopted remuneration policy and highlight any material deviation from that policy. In addition, review the remuneration policy periodically and assess its effectiveness in achieving its objectives.
b) With regards to Nomination:
Recommend clear policies and standards for Board membership, Executive Management and Savola's representatives in its subsidiaries and associates, review the requirements suitable for membership of the Board and Executive Management annually and assess the performance of the Board in terms of strengths and weaknesses and recommend necessary solutions in the best interests of the Company. Ensure on an annual basis, the independence of independent directors and the absence of any conflicts of interest if a Board member also acts as a member of the board of another company.
Review and recommend to the Board for its approval an overall capital allocation framework and implementation model for the Company's investment activities, which takes into account relevant factors such as return on invested capital targets and benchmarks, allocation guidelines and limits, risks limits and strategic objectives. Review and recommend to the Board for its approval investment opportunities, acquisitions, joint ventures or divestitures all in accordance with the Company's existing delegation of authority matrices that are approved by the Board. In addition, to review the balance sheet impact of specific proposed transactions including funding requirements and the impact on the Company's liquidity and debt ratios as part of determining whether to recommend them to the Board for approval.
For more details about the role and responsibilities of the Committee, please refer to the Committee Charter on Savola's website (www.savola.com).
c) With regards to Corporate Governance (CG):
Ensure that the Company is in compliance with CG regulation issued by CMA and the Company's CG Manual and policies, and review; update CG Manual and rules pursuant to statutory requirements and best practices; as well as review and develop a code of professional conduct representing the Company's values and other internal policies and procedures in order to fulfill the Company's requirements, and comply with best practices; Regularly inform the Board members of the developments in corporate governance and best practices, as well as all the competences stipulated in Article (94) of the CG regulation issued by CMA.
For more details about the role and responsibilities of the Committee, please refer to the Committee Charter on Savola's website (www.savola.com).
b) Board Committees continued
• Statement of attendance for Committee meetings held during 2020:
Meetings during 2020
d) Remuneration of the Board, Committee members and Executive Management d-1) General standards for Remuneration:
No.
Member
28 Jan
11 March
28 April
28 June
31 Aug
15 Sept
9 DecTotal
1. Eng. Mutaz Qusai Alazawi (Chairman)
The shareholders' AGM held on 2 November 2017 approved the Remuneration Policy of the Board of Directors, Committees and Executive Management. This policy regulates the remuneration of the Board of Directors, Committees and the Executive Management of Savola Group to meet the provisions of paragraph (1) of Article (61) of the CMA Corporate Governance Regulation.
√
√
√
√
√
√
√
7 of 7
(Non-Executive Savola Board member)
2. Mr. Abdulaziz Khaled Al Ghufaily (Non-Executive Savola Board member)
√
√
√
√
√
√
√
7 of 7
The Remuneration and Nomination Committee (RNC) responsibilities include recommending to the Board the remuneration of the Board, its Committees and the Executive Management in accordance with the approved criteria, as follows:
1. Be proportionate to Savola's activities and the required skills for its management.
3. Mr. Fahad Abdullah Al-Kassim (Independent Savola Board member)
√
√
√
√
√
√
√
7 of 7
2. The variable part of the remuneration shall be linked to the long-term performance.
3. Remuneration shall be consistent with the strategy, objectives, the magnitude, nature and level of risks faced by Savola.
4. Dr. Adnan Abdulfattah Soufi (Non-Executive Savola Board member)
5. Mr. Mohammed Ibrahim Al Issa (Non-Executive Savola Board member)
√ √
√ √
√ √
√ √
√ √
√ √
√ √
7 of 7
4. Benchmarking shall be used to take into consideration the remuneration practices of other companies. The disadvantages of such comparisons that might lead to unjustifiable increases in remuneration and compensation shall be avoided.
5. Shall be prepared in coordination with the RNC with respect to new appointments.
7 of 7
-
Mr. Elnour Ali Saad (Committee Secretary)
6. Remuneration shall be based on job level, duties and responsibilities, educational qualifications, practical experience, skills and level of performance.
√
√
√
√
√
√
√
7 of 7
7. Be fair and proportionate to the Board or Committee members' activities carried out and responsibilities borne by the Board or Committee members, in addition to the objectives set out by the Board to be achieved during the financial year.
c) Assessment of the Board of Directors, Committees and members performance:
8. Take into consideration the sector in which Savola operates, its size and experience of its Board members.
Savola has been conducting Board effectiveness reviews since 2009 aiming to identify the strengths and weaknesses of the Board and Committees, with a view to propose solutions in the best interest of the Company. In line with this practice, and under the RNC supervision, Savola adapted the following methods in this regard:
9. Be reasonably sufficient to attract and retain highly-qualified and experienced board members.
10. The remuneration of different Board members may vary depending on the Board member's experience, expertise, duties he/she undertakes and independence and number of Board meetings he/she attended in addition to other considerations.
- Savola engaged Governance Compass, an external and independent consulting firm which is a non-related party to the Group. Governance Compass is a qualified consulting firm specialized in Board and leadership effectiveness assessment. The assessment performed by Governance Compass covered the performance of the Board, Directors, Committees and their meetings throughout 2018. All recommendations resulted from this assessment were applied during 2019 and 2020.
11. The remuneration shall be suspended if it has been determined that such remuneration was based on inaccurate information provided by a member of the Board or the Executive Management.
- Governance Compass was also engaged in 2020 to conduct Board Meeting Effectiveness (BME) surveys to assess the effectiveness of the Board and Committees meetings members' participation and interaction in the discussions during the meetings to reach informed decisions that enhance the Company's performance and ability to achieve its objectives continued during 2020, and the continued assessment results were shared with the Board and an action plan has been developed to address the recommendations, which is being implemented.
12. If the Company developed a program to grant some of its shares to Board members, Executive Management and employees; whether it is a new issue or shares purchased by the Company, the RNC shall supervise this program in light of the Company's bylaws and the relevant CMA laws and regulations.
d-2) Summary of the Remuneration Policy of the Board and Committees:
- Savola conducted an in-house annual Board and Committees evaluation for the year 2020 under the RNC supervision, as per article (41) of the CG Regulations issued by CMA. The evaluation included detailed questionnaires to assess the effectiveness of the Board and Committees' performance during 2020 and to identify the strengths and weaknesses of the Board and Committees in light of their role and responsibilities. With 100% participation rate, the questionnaires' results were analyzed and recommendations were shared with the Board and Committees including the strengths and weaknesses and the relevant action plan. There was a plan to conduct a workshop during 2020, among its agenda to arrange for a special session to train Board members in light of the outcome of the evaluation process, but it was postponed due to the COVID-19 pandemic restrictions.
• The remuneration of Savola Board members may consist of: a specified sum; an attendance fee; allowance; other in-kind benefits; a certain percentage of the net profits; or a combination of 2 or more of these benefits. In no event, shall the remuneration of a Board member exceed the limit stated in the Companies Law and CMA regulations. The remuneration of the various Board members may vary in light of the policy recommended by the RNC and approved by the GA. The policy stipulated that the annual remuneration of the Board member shall be SAR 200,000 and an attendance fee of SAR 5,000 for the session, as well as the other expenses related to the Board activity.
• The remuneration of Independent Board members shall not be a percentage of the profits that are realized by Savola, nor shall it be based directly or indirectly on Savola's profitability.
- The periodic evaluation of the effectiveness of the discussions and decision-making during the Board and Committees meetings (BME surveys) will continue for the year 2021.
• The Board shall determine and approve its Committee's remuneration - excluding the Audit Committee remuneration, attendance fees and other benefits based on the RNC recommendation.
- Savola plans to conduct a comprehensive evaluation of the Board and Committees' effectiveness by an external and independent third party during 2021.
• Committee member remuneration shall consist of an annual remuneration of SAR 100,000 and attendance fees of SAR 5,000 for the session, in line with the approved policy.
• Audit Committee members' remuneration shall be determined by the General Assembly based on the Board's recommendation as per the regulations, which was approved to be SAR 150,000 and attendance fees of SAR 5,000 for the session, in line with the approved policy.
• The remuneration policy of the Board and Committees shall be reviewed from time to time by the RNC, provided that any recommended changes are presented by the Board to the General Assembly in the next meeting for approval.
Expenses allowance
534,5 030,6
- -
534,5
635,6 534,5
534,5
-
534,5 047,61
Aggregate
Amount
000,042 000,042 000,092 000,552
000,522
000,042 000,042
000,092 000,062 000,062 000,062
d) Remuneration of the Board, Committee members and Executive Management continued
184,65 000,008,2
- - - -
-
- -
- - - -
d-3) Summary of the Remuneration Policy of the Executive Management:
End of service award
The RNC shall review and approve the salary scale and the incentive scheme for all employees and Executive Management, on a regular basis, based on the management recommendations and the Executive Management's remuneration which includes:
- - - -
-
- - - - - -
-
Total
• Basic salary (to be paid on a monthly basis at the end of each Gregorian month).
• Allowances that include, but are not limited to, housing, transportation, children's education/school fees and phone allowances.
• Medical insurance benefits for all employees and Executive Management and eligible family members.
• Life insurance policy (including events of partial or permanent disability and natural or unnatural death).
• Annual bonus based on KPIs/SMART associated with individual annual appraisal evaluation.
• Short-term incentive plans linked with extraordinary/exceptional performance and long-term incentive plans such as stock option programs (whenever it exists).
• Other benefits include, but are not limited to, annual leave, annual air tickets, executive airport services and end of service benefits according to labor law and HR policies adopted by the Company.
snoitarenumerelbairaV
Granted shares (insert the value)
- - - -
-
- - - - - -
-
Long-term incentive plans
- - - -
-
- - - - - -
-
Short-term incentive plans
- - - -
-
- - - - - -
-
- - - -
-
- - - - - -
-
• Executive Management team's compensation plans, programs and general guidelines shall be approved by the RNC.
• The CEO implements the remuneration policy for all employees and Executive Management in light of the plans, programs and general guidelines approved by the RNC.
For more details about the Remuneration Policy for the Board, Committees and the Executive Management of Savola Group, please refer to the polices on Savola's website (www.savola.com).
deunitnoc serusolcsidtnavelerrojamdnatropeRecnanrevoGetaroproC
Periodic remunerations
- - - -
-
- -
- - - -
Percentage of the profits
Total
000,042 000,042 000,092 000,552
000,522
000,042 000,042
000,092 000,062 000,062 000,062
- 000,008,2
- - - -
-
- - - - - -
Remunerations of the Chairman, Managing Director or Secretary, if a member
-
- - - -
-
- - - - - -
-
Remunerations for technical, managerial and consultative work
snoitarenumerdexiF
- - - -
-
- - - - - -
-
In-kind benefits
Total allowance for attending
Committee meetings
000,51 000,51 000,56 000,03
A/N
000,56 000,53 000,53 000,53 000,51 000,51
000,523
srebmeM draoB eht fo noitarenumeR )4-d
:)RAS( snoitarenumer 'srebmem draoB fo sliated eht era woleB
Allowance for attending Board meetings
000,52 000,52 000,52 000,52
000,52
000,52 000,52
000,52 000,52 000,52 000,52
Specific amount
000,002 000,002 000,002
eltiT
rebmeM rebmeM rebmeM
emanrebmeM
.oN
:srotceriD tnednepednI :tsriF
haibaRlA damaHredaB.rM .1
missaKlA halludbAdahaF.rM .2
namharludbA.rM .3
saddAizmaRdemmahoM
000,002 rebmeM lAzizaludbAnakaR.rM .4
ldaF
:srotceriD evitucexE-noN :dnoceS
000,002 namriahC lAridakludbAnamialuS.rM .5
000,002 namriahC-V
000,002 000,002 000,002 000,002 000,002
000,572 000,002,2
rebmeM rebmeM rebmeM rebmeM rebmeM
)eettimmoCynafo rebmematoN(bidiahuM
assIlAhalludbAredaB.rM .6
ridakludbAmassE.rM .7
bidiahuMlA
delahKzizaludbA.rM .8
yliafuhGlA
hattafludbAnandA.rD .9
fiuoS
iwazalAiasuQzatuM.gnE .01
demmahoM.rM .11
assIlAmiharbI
latoT
d-5) Remuneration of Committee members:
Below are the details of Committees members' remunerations (SAR):
Fixed remunerationFixed remuneration
(excluding the allowance for attending
(excluding the allowance for attending
No.
Committee / member name
Title
Board meetings)Attendance fees (5,000 per meeting)
No.
Committee / member name
Title
Board meetings)Attendance fees (5,000 per meeting)
Total
Expenses allowanceTotal
Expenses allowance
Audit Committee Members:
4. Mr. Mohammed Ibrahim Al Issa (Non-Executive, Savola Board member)Member
100,000
35,000
135,000
Mentioned in the previous Board remuneration table
1. Mr. Fahad Abdullah Al Kassim (Independent, Savola Board member)Chairman
150,000
30,000
180,000
Mentioned in the previous Board remuneration table
5. Dr. Adnan Abdulfattah Soufi (Non-Executive, Savola Board member)Member
100,000
35,000
135,000
N/A
2. Mr. Mohammed Ibrahim Al Issa (Non-Executive, Savola Board member)
Member
150,000
30,000
180,000
Mentioned in the previous Board remuneration table
Total
500,000
175,000
675,000
-
3. Mr. Bader Hamad Al Rabiah (Independent, Savola Board member)Member
150,000
30,000
180,000
Mentioned in the previous Board remuneration table
d-6) Senior executives' compensation of Savola Group for 2020:
Compensation and benefits paid to 5 senior executives including the CEO and CFO of the Group during 2020 were:
Senior executives' (5 in total)
4. Dr. Abdul Raouf Suliman Banaja (Independent, external member)Member
150,000
30,000
180,000
N/A
compensation including the CEO and the
No.
Description
CFO (SAR '000s)
5.
Mr. Tareq Abdullah Al Garaawy
Member (as of 6 October 2020)
35,462
5,000
40,462
-
Fixed Remuneration
- Salaries
Ex-Committee Member:
- Allowances (including housing, transportation, health insurance, education allowance, etc.)
13,699 4,794
-Dr. Ammr Khalid Kurdi (Independent, external member)Member (resigned as of 1 May 2020)
50,000
15,000
65,000
2,435
- In-kind benefits
480
Total of fixed remuneration
18,973
Variable RemunerationTotal
685,462
140,000
825,462
2,435
- Periodic remuneration
Remuneration and Nomination Committee Members:
- Profits
- -
1.
Mr. Rakan Abdulaziz Al Fadl (Independent, Savola Board member)Chairman
100,000
15,000
115,000
N/A
- Short-term incentive plans (including performance-related bonus for 2020)
9,880
- Long-term incentive plans
-
2.
Mr. Bader Abdullah Al Issa (Non-Executive, Savola Board member)
Member
100,000
15,000
115,000
Mentioned in the previous Board remuneration table
- The value of the Granted shares
319
Total of variable remuneration
10,199
3.
Mr. Essam Abdulkadir Al Muhaidib (Non-Executive, Savola Board member)
Member
100,000
15,000
115,000
Mentioned in the previous Board remuneration table
- End of service award
1,742
- Total remuneration for Board executives, if any
70
4.
Mr. Abdulrahman Mohammed Ramzi Addas
Member
100,000
15,000
115,000
N/A
Grand total
30,984
(Independent, Savola Board member)
5.
Mr. Johan Brand
Member
100,000
15,000
115,000
3,000
(Independent, external member)
Total
500,000
75,000
575,000
3,000
Clarification: The Group has complied with the disclosure of the components of the senior executives' remuneration on aggregate in line with the requirements of subparagraph (b) of paragraph (4) of Article 93 of the Corporate Governance Regulations issued by CMA, but to protect the interests of the Company, its shareholders and employees, and to avoid any damage that may occur as a result of disclosing the detailed senior executives' remuneration by position, the Company did not disclose the details as per Appendix (1) of the CG Regulations.
Investment Committee Members:
1.
Eng. Mutaz Qusai Alazawi (Non-Executive, Savola Board member)
Chairman
100,000
35,000
135,000
Mentioned in the previous Board remuneration table
2.
Mr. Abdulaziz Khaled Al Ghufaily (Non-Executive, Savola Board member)
Member
100,000
35,000
135,000
Mentioned in the previous Board remuneration table
3.
Mr. Fahad Abdullah Al Kassim (Independent, Savola Board member)Member
100,000
35,000
135,000
Mentioned in the previous Board remuneration table
e) Remuneration of the Board, Committee members and Executive Management continued
d-7) The relation between the paid remuneration and the adopted Remuneration Policy:
Board members and their relatives:
Based on the remuneration policy of the Board of Directors and its Committees and Executive Management, mentioned earlier in this Report, and in light of the remuneration paid for the Board, its Committees, and the Executive Management and what is proposed for the Board, it shows Savola conforming with the approved policy without any material deviation from it.
Beginning of the year
End of the yearNo.
Names of members whom the interest, contractual securities or rights issue belongs to
e) Description of any interest of the Board Members, senior executives and their relatives e-1) Description of any interest of the Board members and their relatives in shares or debt instruments of the Company:
Board members and their relatives
6. Mr. Elnour Ali Saad (Executive Director Corporate Governance & Legal Affairs and Board Secretary)
Beginning of the year
End of the yearNo.
Names of members whom the interest, contractual securities or rights issue belongs toSharesDebt instrumentsSharesDebt instrumentsNet changePercentage of change
7. Mr. Morhaf Mohammed Alsamman (Executive Director Human Resources & Corporate Services)
First: Board members:
1. Mr. Sulaiman Abdulkadir Al Muhaidib
2. Mr. Bader Abdullah Al Issa
1,000 1,025
- -
1,000 1,025
-
- 0%
- Eng. Anees Ahmed Moumina
-
- 0%
(Savola Group Ex-CEO, his resignation was announced on Tadawul on
3. Mr. Abdulaziz Khaled Al Ghufaily
4. Mr. Essam Abdulkadir Al Muhaidib
1,000 2,500
- -
1,000 2,500
- -
- 0%
28 October 2020, and it was effective as of 31 December 2020)
- 0%
5. Eng. Mutaz Qusai Alazawi
6. Mr. Fahad Abdullah Al Kassim
1,000 2,000
- -
1,000 2,000
- -
- -
0% 0%
- Mr. Nouman Farrukh Muhammad Abdussalam
(Ex-Group Chief
Financial Officer, until 31 December 2020)
7. Mr. Mohammed Ibrahim Al Issa
8. Mr. Abdulrahman Mohammed Ramzi Addas
1,000 1,000
-
-
1,000 1,000
-
-
- -
0% 0%
Third: Senior executives' relatives: N/A
9. Dr. Adnan Abdulfattah Soufi
10. Mr. Rakan Abdulaziz Al Fadl
1,000 225,660
11. Mr. Bader Hamad Al Rabiah
2,500
- - -
1,000 142,060
2,500
- - -
-
0%
e-3) Description of any interest of Board members and their relatives in shares or debt instruments in Herfy Food Services Co. (a listed subsidiary of Savola Group):
(83,600)
(37.05%)
Board members and their relatives:
-
0%
Beginning of the year
End of the year
Second: Board members' relatives: N/A
No.
Names of members whom the interest, contractual securities or rights issue belongs toSharesDebt instrumentsSharesDebt instrumentsNet changePercentage of change
e-2) Description of any interest of the senior executives and their relatives in shares or debt instruments of the Company:
First: Board members:
1. Mr. Essam Abdulkadir Al Muhaidib
1,960
-
1,960
-
- 0%
Board members and their relatives:
2. Eng. Mutaz Qusai Alazawi
1,400
-
1,400
-
- 0%
Beginning of the year
End of the year
Second: Board members' relatives: N/A
No.
Names of members whom the interest, contractual securities or rights issue belongs toSharesDebt instrumentsSharesDebt instrumentsNet changePercentage of change
Third: Executive Management:First: Board members:
1.
1. Mr. Waleed Khalid Fatani (Savola Group CEO as of 1 January 2021)
26
-
26
-
- 0%
Eng. Anees Ahmed Moumina (Savola Group Ex-CEO until 31 December 2020)
64
-
64
-
- 0%
Fourth: Executive Managements' relatives: N/A
2. Mr. Sameh Hassan (Savola Foods Co. CEO)
-
-
-
-
- 0%
3. Dr. Bander Talaat Hamooh (Panda Retail Co. CEO)
26
-
26
-
- 0%
4. Mr. Wajid Usman Khan (Chief Financial Officer as of 1 January 2021)
_
_
_
_
_ 0%
5. Mr. Mohammed Nasr
-
-
-
-
-
0%
(Executive Director - Investment)
Debt | Debt | Percentage | |||
Shares | instruments | Shares | instruments | Net change | of change |
- | - | - | - | - | 0% |
- | - | - | - | - | 0% |
Second: Senior Executive resigned during 2020 | |||||
- | - | - | - | - | 0% |
- | - | - | - | - | 0% |
f) The major Board resolutions and important events during the year, which some of them announced through Tadawul or were published on the Company website:
g-3) Procedures for informing the Board members of the shareholders' suggestions and notes on the Company and its performance:
No.
Date
Announcement
Keeping the Board members informed of the shareholders' proposals and comments on the Company and its performance through the following procedures:
1. 29 January 2020
The Board approve to buy back Savola shares to retain them as Treasury Shares under the Employees Long-Term Incentive Program (LTIP) and it was announced in Tadawul (Savola intention to purchase its shares)
1. Presenting the shareholders' proposals and comments (if any) to the Board members at the nearest meeting or any other effective means of communication to achieve the purpose on an ongoing basis.
2. 29 January 2020
Approve the interim financial results for the period ended on 31 December 2019 (12 months)
2. Organizing continuous meetings with investors (Investor Relation Programs) and briefing the Board on the substantive proposals they make.
3. 29 January 2020
Recommend the distribution of cash dividend for the year 2019
3. The Board members attending the General Assembly meetings where shareholders raise their suggestions to the Board during the meeting and the Board responds to these suggestions during the meeting.
4. 17 March 2020
Approve the Annual Financial Results for the period ended on 31 December 2019
5. 06 April 2020
Invite the Shareholders to attend the Extraordinary General Assembly Meeting No.32 (First meeting)
In addition, the Chairman of the Board discusses the shareholders' suggestions (if any) and the performance without the presence of any of the executives (whenever deemed necessary).
6. 23 April 2020
The commencement date of the Electronic Voting on the agenda of its Extraordinary General Assembly Meeting (No. 32) (First meeting)
g-4) Savola Group equity profile as of 31 December 2020:
7. 30 April 2020
The results of the Extraordinary General Assembly Meeting No. (32) (First meeting)
8. 30 April 2020
The resignation of Dr. Omar Kurdi (an Audit Committee member)
9. 30 April 2020
Approve the Interim Financial Results for the period ended on 31 March 2020 ( 3 months )
10. 16 August 2020
Approve the Interim Financial Results for the period ended on 30 June 2020 (6 months)
11. 14 September 2020
Savola Group announces the results of the buyback of its shares (First tranche)
12. 06 October 2020
The appointment of Mr. Tareq Abdullah Al Garaawy (an Audit Committee member)
13. 28 October 2020
Approve the Interim Financial Results for the period ended on 30 September 2020 (9 months)
Declaration:
14. 28 October 2020
Approve the resignation of the Group CEO and appoint a new Group CEO
g) Shareholders' rights and investor relations
* The Group does not have preferred shares or shares with special priority rights of voting, issued to either shareholders, Board of Directors or employees. All shares of the Group are ordinary shares of equal nominal value and rank equally in voting rights and other rights as specified by regulations.
Illustrating Savola's commitment to enhancing its relationship with shareholders, investors and all stakeholders, and because of the Group's strong beliefs in the importance of corporate governance to protect shareholders' rights and maintain effective internal controls through the activation of the Board and its Committees' roles, and commitment to the principles of disclosure and transparency, during 2020, the Group continued to implement and comply with the Corporate Governance Regulations of Saudi Arabia's Capital Market Authority and other relevant regulations. In addition to the performance and financial results previously outlined, Savola discloses information that is of interest to its shareholders and investor community in line with relevant regulations and best international practices adopted by the Group in corporate governance and transparency. These are:
** The total number of floated shares changes from time to time based on the trading movement of Savola Group shares on the Saudi
Stock Exchange. Please note that the number of floated shares has been taken from Tadawul's records on 1 March 2021.
g-5) Dates of key events for shareholders and investors:
In accordance with international best practice in Corporate Governance, Savola shares the dates of key anticipated events during 2021 which may be of interest to our valued shareholders and investors:
No.
Dates 2021
Key events for 2021
g-1) Shareholder rights and mechanisms of communication:
Due to the Group's belief, interest and care in the rights of its shareholders, and in light of applicable regulations, these rights form part of Savola's bylaws and Corporate Governance Manual, which can be viewed on Savola's website.
1. 27 January
Audit Committee meeting to recommend to the Board approval of the financial results for the fourth quarter of 2020
2. 27 January
g-2) Enable shareholders and investors to access information:
Savola publishes financial statements, announcements and key decisions on the Saudi Stock Exchange (Tadawul) website, in daily newspapers and in the annual Directors' Report. A dedicated department manages and deals with shareholder affairs and responds to their enquiries.
Board of Directors' meeting regarding the financial results for the fourth quarter of 2020 which will be announced in the light of the Board's decision during the prescribed period
3. Within one week after financial results announcementEarning call for Institutional investors and Analysts regarding financial results for Q4, 2020.
4. 15 March
Audit Committee meeting regarding the audited financial results for 2020
5. 15-16 March
The annual financial results for 2020 will be approved by Board of Directors
6. 16-17 March
Date of publishing the Annual Financial Results of year 2020 on Tadawul and then Savola website
7. 17-31 March
Date of publishing the Savola Group Annual Report for 2020
8. 28 April
Audit Committee meeting to recommend to the Board approval of the financial results for the first quarter of 2021
No. | Detail | Value in SAR/Number of shares |
1. | Company authorized capital | SAR 5,339,806,840 |
2. | Issued shares (all Company's shares are ordinary shares)* | 533,980,684 |
3. | Floated issued shares (by Tadawul records)** | 497,856,839 |
4. | Paid-up capital | SAR 5,339,806,840 |
5. | Nominal value per share | SAR 10 |
6. | Paid-up value per share | SAR 10 |
g) Shareholders' rights and investor relations continued
9. 28 April
Board of Directors' meeting regarding the financial results for the first quarter of 2021 which will be announced in the light of the Board's decision during the prescribed period
b) Dividends proposed for distribution for 2020 and their payment process:
10. 28 April
Hold the Annual General Meeting (AGM) which will be announced as per regulation (proposed date subject to the approval of the official authorities)
11. Within one week after financial results announcement
Earning call for Institutional investors and Analysts regarding financial results for Q1, 2021.
In light of the above Dividends Distribution Policy, the Savola Group Board in its meeting on 27 January 2021, and in light of the achieved net profit amounted to SAR 910.8 million for the year 2020, recommended the distribution of SAR 400.49 million (i.e. SAR 0.75 per share) as cash dividends for the year 2020, which represents 7.5% of the Company's nominal share value. The maturity date for these cash dividends will be for all shareholders who are registered in Tadawul at the end of the second trading day following the day of the Annual General Assembly Meeting (AGM) which will be fixed after securing the formal approval from the relevant official authorities, and accordingly, the said AGM will ratify the above Board's recommendation. The dividends will be paid after the approval of the AGM and will be deposited in the shareholders' accounts as will be detailed in the announcement, which will be published on Tadawul at a later date.
12. 3 August
Audit Committee meeting to recommend to the Board approval of the financial results for the second quarter of 2021
• The following statement shows the proposed dividends to be distributed for 2020:
13. 4-5 August
Date of publishing the financial results for the second quarter of 2021 on Tadawul once approved by the Board based on the recommendation of the Audit Committee
14. Within one week after financial results announcement
Earning call for Institutional investors and Analysts regarding financial results for Q2, 2021.
15. 28 October
Audit Committee meeting to recommend to the Board approval of the financial results for the third quarter of 2021
Shareholders' Information and Share Price Data:
16,. 28 October
Board of Directors' meeting regarding the financial results for the third quarter of 2021 which will be announced in the light of the Board's decision during the prescribed period
As of 31 December 2020, Savola had 95,360 shareholders as per Tadawul records, the following tables provide an overview of Savola's ownership structure including criteria and types:
a) Savola Investors according to nature of investor:
17. Within one week after financial results announcement
Earning call for Institutional investors and Analysts regarding financial results for Q3, 2021.
Investor Nature
Percentage of Ownership
Number of Investors
Number of Shares
Corporate Investors
69.75%
578
372,446,481
18. 2nd half of 2021
Conduct annual workshop for the Board of Directors to review the strategy for the Group and its subsidiaries.
Individual Investors (including share certificates holders)
30,25%
94,782
161,534,203
Note: Savola would like to point out that the above dates are approximate and may change according to notifications received from official authorities. Although Savola is determined to carry out these events on the planned dates, we assume no obligation from failure to do so.
Total
100%
95,360
533,980,684
g-6) The Dividends Distribution Policy: a) The policy:
b) Savola Investors according to their nationality:
As per Article (45) of the Company bylaws the Company's annual net profits shall be distributed as follows:
Investor Nationality
Percentage of Ownership
Number of Investors
Number of Shares
1. 10% of the net profits shall be set aside to form a statutory reserve. However, the ordinary general assembly may discontinue such procedures when the reserve totals 30% of the paid-up capital.
Saudi Investors
2. The ordinary general assembly may decide to allocate other reserves, in the amount that serves the Company's interests or ensures distribution of stable profits as much as possible to shareholders. The said assembly may, as well, deduct from the net profits such amounts as are required for the setting-up of or providing aid to social institutions for the Company's employees.
GCC Investors Foreign Investors
89.14% 1.09%
94,366
476,009,679
84
5,796,236
9.77%
910
52,174,769
Total
100%
95,360
533,980,684
3. The remaining profits shall be distributed to shareholders pursuant to a recommendation of the Board of Directors as required by the regulations in this regard, taking into account the provisions of Article (46) of the bylaws which states that:
- Shareholder shall be entitled to his share of dividends as per the general assembly resolution issued in this regard in the recommendation of the Board of Directors. The resolution shall specify the maturity date and the distribution date. The entitlement of profits shall be to the shareholders who are registered in the shareholders' records at the end of the maturity date.
c) Savola Investors according to their nature:
Investor Nature
Percentage of Ownership
Number of Investors
- The Company may, under its bylaws, distribute interim dividends (quarterly or bi-annual) to its shareholders after fulfilling the statutory requirements.
GOSI and other Governmental or semi-Governmental Investors Assila Investments Co.
20.66% 11.24%
12 1
4. In light of the dividends policy and the Group's bylaws, the Group used to distribute cash dividends in the range of 50% to 60% of the net profit achieved during each financial year based on the Board of Directors' recommendations.
Abdulkadir Al Muhaidib & Sons Co. Mr. Abdullah M.A. Al Rabiah
8.23%
1
8.22%
1
Al Muhaidib Holding Co.
6.36%
1
Saudi funds
6.58%
83
GCC funds
0.31%
19
Swap agreements
0.02%
5
Other Individual Investors (including share certificate holders) Other Corporate Investors
22.03%
94,781
16.35%
456
Total
100%
95,360
Percentage of interim dividends distributed during | Proposed dividend ratios | ||
the year | at the end of the year | Total recommended dividends (SAR) | |
Percentage | No interim dividends were | (SAR 0.75 per share) which represents | SAR 400.49 million |
distributed during the year 2020 | 7.5% of the nominal value of the share | ||
Total | SAR 400.49 million |
g) Shareholders' rights and investor relations continued
d) Savola Investors according to their the percentage of ownership:
g-7) Major shareholders list:
Ownership Size
Percentage of Ownership
Number of Investors
Below are shareholders owning 5% or more of the total shares of the Group, and movements during 2020 (in SAR):More than 1 million shares
From 500,000 to less than 1 million shares From 100,000 to less than 500,000 shares From 50,000 to less than 100,000 shares From 10,000 to less than 50,000 shares From 5,000 to less than 10,000 shares From 1,000 to less than 5,000 shares
75.58% 4.05%
50 32
Description of any interest in a class of voting shares held by persons (other than the Company's directors, senior executives and their relatives) who have notified the
Company of their holdings, together with any change to such interests during the last fiscal year
8.89% 2.89%
206 220
No.
Name
NationalityShares at the beginning of 2020
Ownership at the beginning of 2020
Shares at the end of 2020
Percentage at the end of 2020
Shares change
Percentage change
1.
Assila Investments Co.
Saudi Company
60,000,000
11.24%
60,000,000
11.24%
- 0%
3.95%
993
2.
1.16% 1.89%
925 5,103
Abdulkadir Al Muhaidib & Sons Co.
Saudi Company
43,966,110
8.23%
43,966,110
8.23%
- 0%
3.
Less than 1,000 shares
1.59%
87,831
Mr. Abdullah M.A. Al Rabiah
Saudi National
43,892,500
8.22%
43,892,500
8.22%
- 0%
Total
100%
95,360
4.
General Organization for Social Insurance (GOSI)
Saudi Government Institution
35,626,085
6.67%
35,626,085
6.67%
- 0%
e) Savola Investors according to their ownership type:
5.
Ownership Type
Percentage of Ownership
Number of Investors
Number of Shares
Al Muhaidib Holding Co.
Saudi Company
33,980,684
6.36%
33,980,684
6.36%
- 0%Investment Portfolios
Shares Certificates
99.02% 0.98%
51,698 43,662
528,773,566
5,207,118
Total
100%
95,360
533,980,684
Declaration: Regarding the declaration of movements in major shareholders' ownership in accordance with listing rules, the Group confirms that it has not received any written notification during 2020 from any of its major shareholders indicating any changes or movement in their ownership percentages. The disclosed information is based on the Saudi Stock Exchange (Tadawul) records on 31 December 2020.
f) Share price data (SAR)
g-8) Details of retained Treasury Shares:
Share price
Share price
1 January 2020
31 December 2020
Share price 3 years ago
52-week high
52-week lowChange from 2019-2020
Number of retainedValue of the retained
Treasury Shares
Treasury SharesDate of retentionPurpose of keeping the shares as Treasury Shares
34.95
42.50
42.15
54.00
29.00
21.6%
341,675
SAR 16,508,713
13 September 2020
Shares performance summary at the end of each month (high, low, and closing) during the fiscal year 2020 (all information was obtained from the Company's page in the Saudi Stock Exchange - Tadawul's website):
Month
High
Low
Close
To retain the shares as Treasury Shares under the Employees LTIP which aims to attract and retain outstanding talent and to motivate them to further strengthen their performance to achieve Savola Group objectives. The shares will be transferred to the eligible employees as per the program conditions and policy approved by the Board after the vesting period elapses (i.e. after 3 years from the allocation date) according to each tranche starting date.
January
February March April May
36.10 33.45
35.50 32.05
35.75 33.45
g-9) Number of Company's requests of shareholders records, dates and reasons thereof for 2020:
35.90 41.20 41.80
35.05 40.15 40.30
35.70 40.50 40.65
No.
Date of request
Reason
1.
29 April
To determine the eligibility for attending the Extraordinary General Assembly Meeting (No. 32)
2.
3 May
To determine the eligibility for dividends and its distribution
June
43.05
42.00
42.10
3.
July
46.95
46.05
46.50
2 January, 8 April, 1 July, 6 September and 31 December
August
49.40
48.05
48.60
(5 Reports) To review the changes in share ownership for investor relations purposes and to update the transparency screen which is being published on the Company's website
September
October
November
December
48.30 48.00 46.05 43.00
47.95 45.80 45.10 42.50
48.00 45.80 46.05 42.50
Total
7 Reports
g) Shareholders' rights and investor relations continued
Corporate Action
No.
New Capital
Previous Capital
Issue Type
Date
h) Transactions with related parties that took place during 2020, these transactions will be renewed for the upcoming year in the upcoming AGM meeting as per laws and regulation in this regard:
1
5,339,806,840
5,000,000,000
Acquisition
04 November 2013
2
3
5,000,000,000 3,750,000,000
3,750,000,000 3,000,000,000
Bonus Shares
25 March 2008
Information relating to any business or contract to which the Company is a party and in which a Board member, a senior executive or any person related to any of them is or was of interest:
Bonus Shares
11 October 2006
4
5
3,000,000,000 1,800,000,000
1,800,000,000 1,500,000,000
Bonus Shares
15 April 2006
1) Transactions and contracts with a direct or indirect interest between the Company and Abdulkadir Al Muhaidib & Sons Co. and Al Muhaidib Group and their subsidiaries or any person related to any of them:
Right Issue
16 November 2005
Dividends
No.
The nature of the transaction or contract
Dividends per shareYear
(SAR)Total of Dividends distributed/ declared for the year (SAR'000s)
a. Savola and Al Muhaidib:
Net income (SAR'000s)Percentage
Business or contract in which Abdulkadir Al Muhaidib & Sons Co. and its subsidiaries or any person related to any of them has direct or indirect interest. The total amount of the transactions is SAR 636.78 million.
2016
0.75
2017
1
400,486 533,980
(363,287)
-
1,025,618
52.06%
2018
-
-
(520,380)
-
2019
2020
0.30 0.75
160,194 400,486
475,630 33.68%
910,802 43.97%
2016-2020
1,495,146
1,528,383 97.8%
Total of Dividends distributed/declared for the year (SAR '000s)
600,000 500,000 400,000 300,000 200,000 100,000
533,980
400,486
400,486
160,194
0
2016
2017
2019
2020
Total
SAR 636.78 million
The duration | Name of the Board | ||
The value amount | of the | member/ senior executive or | |
of the transaction or | The conditions of the | transaction | any person related to any one |
contract for 2020 | transaction or contract | or contract | of them |
SAR 5.83 million | In the ordinary course of business and general commercial terms worked without any preferential treatment (including product quality, payment method, pricing, delivery, | Annually | Mr. Sulaiman Abdulkadir Al Muhaidib who is the chairman of Abdulkadir Al Muhaidib & Sons Co. Group as well as the Chairman of Savola, in addition to, Mr. Essam Abdulkadir Al Muhaidib who is the Managing Director of Abdulkadir Al Muhaidib & Sons Co. as well as a Board member of Savola. Business and commercial contracts between Abdulkadir Al Muhaidib & Sons Co. |
| In the ordinary course of business and general commercial terms worked without any preferential treatment (including renewal, payment methods, maintenance, insurance, etc.) | and its subsidiaries are executed with some of Savola subsidiaries in the Food and Retail Sectors. Also, Abdulkadir Al Muhaidib & Sons Co. owns 8.23% of Savola shares. |
h) Transactions with related parties that took place during 2020, these transactions will be renewed for the upcoming year in the upcoming AGM meeting as per laws and regulation in this regard continued
2) Transactions and contracts with a direct or indirect interest between the Company and Almarai Co.:
4) Transactions and contracts with a direct or indirect interest between the Company and other companies:
The duration
No.
The nature of the transaction or contract
No.
The nature of the transaction or contract
b. Savola and Almarai Co:
Business or contract in which Almarai Co. and its subsidiaries, or any person related to any of them, has a direct or indirect interest. The total amount of the transactions is SAR 887.34 million.
i) A description of any transaction between the Company and any related party:
Total
SAR 887.34 million
3) Transactions and contracts with a direct or indirect interest between the Company and Herfy Food Services Co.:
The following transactions mainly represent sale and purchase of products and leases of stores in the normal course of business with associates and other entities related to subsidiaries. The terms of such transactions are mutually agreed between the parties, with the same conditions and with no preference over third parties:
No.
The nature of the transaction or contractThe value amount of the transaction or contract for 2020
The conditions of the transaction or contractThe duration of the transaction or contractName of the Board member/ senior executive or any person related to any one of them
No.
Related party
Relationship
Transaction
Duration
Value/Amount
1. Certain shareholders of USC
c. Savola and Herfy Co:
2. Certain shareholders of AICShareholder's of a subsidiary Shareholder's of a subsidiary
Trade
During 2020
Trade
During 2020
SAR 165.72 million SAR 75.89 million
Business or contract in which Herfy Food Services Co. and its subsidiaries or any person related to any of them has direct or indirect interest. The total amount of the transactions is SAR 51.34 million.
3. Intaj - Savola Investments
Associate
4. Arabian Centers Company - Al Hokair
Shareholder of a subsidiary
Non-trade Non-tradeDuring 2020
During 2020
5. Seafood International One
Associate
Trade
During 2020
FZCO - SFC
Non-trade
During 2020
SAR 14.1 million SAR 34.72 million SAR 17.20 million SAR 2.73 million
6. Khairat Al Sharq for General Trade and Manufacturing Foodstuff Company
Associate
Non-tradeDuring 2020
SAR 963,000
7. United Sugar Co. Egypt - SFC
Associate
Trade
During 2020
Non-trade
During 2020
SAR 26.09 million SAR 34.71 million
Total
SAR 51.34 million
The duration | Name of the Board | ||||||
The value amount | of the | member/ senior executive or | The value amount | of the | Name of the Board member/ | ||
of the transaction or | The conditions of the | transaction | any person related to any one | of the transaction or | The conditions of the | transaction | senior executive or any person |
contract for 2020 | transaction or contract | or contract | of them | contract for 2020 | transaction or contract | or contract | related to any one of them |
SAR 8.89 million | In the ordinary course of business and general commercial terms worked without any preferential treatment (including product quality, payment method, pricing, delivery, delay penalties, etc. | Annually | Almarai, a listed company in which Savola Group owns 34.52%. Three of Savola Directors are members of Almarai's Board (Mr. Sulaiman Abdulkadir Al Muhaidib, Mr. Bader Abdullah Al Issa as well as Eng. Anees Ahmed Moumina Group CEO until 31 December 2020). |
1. Leasing shops and retail purchases of food products by Panda Retail Co. (a subsidiary of Savola) to/from Herfy Food Services Co. SAR 43.1 million | In the ordinary course of business and general commercial terms worked without any preferential treatment (including renewal, payment methods, maintenance, insurance, etc.) | Annually | Herfy Food Services Co., a listed company, in which Savola Group owns 49% (directly and indirectly); Savola has (3) representatives on Herfy's Board: Mr. Essam Abdulkadir Al Muhaidib, who is the Chairman of Herfy Board, and Eng. |
SAR 3.39 million | In the ordinary course of business and general commercial terms worked without any preferential treatment (including product quality, payment method, pricing, delivery, delay penalties, etc.) | Mutaz Qusai Alazawi who are also Board members of Savola Group, as well as Eng. Anees Ahmed Moumina Group CEO until 31 December 2020. |
| In the ordinary course of business and general commercial terms worked without any preferential treatment including renewal, payment methods, maintenance, insurance, etc. | Annually | Kinan International for Real Estate Development Co., of which Savola owns 29.99%, and Savola has two members on Kinan's Board: Mr. Mohammed Ibrahim Al Issa a Savola Board member, and Eng. Anees Ahmed Moumina Group CEO until 31 December 2020. Dur Hospitality Co., where Mr. Badr Abdullah Al Issa is a Board member and he is also a Board member of Panda Retail Co. (a subsidiary of Savola) |
j) What has/has not been implemented of the CG regulations, CG procedure and effectiveness, and initiatives: j-1) Board Declaration according to CMA CG Regulations for 2020:
No.
Declaration/Confirmation
As per the CG regulations requirement for the Company to make a declaration regarding non-applicable or non-existing matters, the Board undertakes the following:
20.
There is no arrangement or agreement under which a shareholder of the issuer has waived any rights to dividends.
The Board confirms that:
A) The Company's accounting records were properly prepared.
21.
No.
Declaration/Confirmation
B) Savola Group's internal control systems and procedures were properly developed and effectively executed.
C) There are no doubts about the Group's ability to continue its business activities.
1.
The External Auditors' report for the year 2020 does not contain any reservations on the relevant annual financial statements. The Board is committed to provide the CMA with any additional information as may be required in the event of auditors expressing any reservations on the annual financial statements.
22.
There was no recommendation by the Audit Committee that conflicted with the Board of Directors' decisions. The Board did not reject any recommendations regarding the appointment of the Company's external auditor, its dismissal, the determination of its fees, the performance evaluation or the appointment of the internal auditor during the year.
2.
The Company's books and records comply with the accounting standards issued by SOCPA.
3.
There was no recommendation by the Board of Directors to replace the External Auditors (KPMG), appointed for the fiscal year of 2020 to audit the Group's financials and they were not replaced during the year.
23.
4.
The External Auditors did not provide consultancy services to the Group during 2020 and did not receive any fees in this regard.
The Company issued during January 2013 the first tranche of the Sukuk Program to a number of investors in an aggregate amount of SAR 1.5 billion and in July 2019, issued other Sukuk pursuant to a new Program in an aggregate amount of SAR 1 billion, some were issued for monetary consideration, and some exchanged with the previous Sukuk issued in 2013; while the remainder issued under the previous Program were redeemed on its original maturity date (due in January 2020).
5.
The Board of Directors did not receive any request from the External Auditor to convene a General Assembly.
j-2) Procedure set by the Group to monitor the effectiveness of Savola's CG Code:
6.
The Company has not granted any cash loans whatsoever to any of its Board members or rendered guarantees with respect to any loan entered into by a Board member with third parties.
7.
There were no penalties or precautionary attachments imposed on the Company by the Capital Market Authority, or by any other supervisory, regulatory or judicial body.
• The Group has a Corporate Governance (CG) Manual which was developed and approved for the first time in 2004, and has been updated in line with the CG regulations issued by the CMA and international best practice in CG and transparency. The Company has reviewed and updated its CG framework and policies during 2017-2019 following the issuance of the Corporate Governance Regulations in February 2017 and the amendment issued in 2018, and all updates were approved by the competent administrative bodies, whether the Board of Directors or the General Assembly (where applicable).
8.
The Company has avoided taking any action that might hamper the use of shareholders' voting rights.
9.
The Company did not receive any request to convene a General Assembly or a request to add one or more items to the agenda upon its preparation from a number of shareholders whose shareholdings represent at least 5% of the equity share capital.
• The CG Committee role was added to the RNC's responsibilities and duties and the committee charter was amended accordingly and was approved by the General Assembly. Also, the Board of Directors and the Executive Management monitor the Corporate Governance requirements. In addition, the Compliance Officer has a support team at Group-level to monitor CG code implementation and compliance, ensure proper implementation of the Board's resolution regarding CG and submit regular reports to the Board. The Group Board and CEO supervise the overall implementation and development of the governance code in general.
10.
The Chairman of the Board did not receive a written request to call for an unscheduled meeting from any 2 or more of the Board members during 2020.
• The Group appoints from time to time CG Expert Firms in order to enhance its CG practices to meet regional and international best practices in this field.
11.
The Board of Directors did not waive any of the Company's debts during the year 2020.
12.
There is no interest, contractual documents and subscription rights that belong to the members of the Board of Directors and their relatives in the shares or debt instruments of the subsidiaries except as mentioned in this Report in (e-3) regarding the ownership of some of them in Herfy Food Services Co.
• The Group shares its CG experience with local, regional and international rating agencies and institutions with the objective to identify its strengths and weaknesses and accordingly develop a plan for improvement.
• The Group has disclosed its CG framework and all policies in this respect on its website (www.savola.com).
13.
There is no interest, contractual documents and subscription rights of senior executives and their relatives in the shares or debt instruments of subsidiaries.
Note: The Company has disclosed the conflict of interest for Board Members and Senior Executives and their relatives.
j-3) What provisions have/have not been implemented of the Corporate Governance Regulations, with justifications: The Company applies all the provisions of the Corporate Governance Regulations issued by the CMA, except for the following optional items
14.
There are no debt instruments issued to Savola Group and its subsidiaries except as detailed in this Report in the loans section.
No.
Article/ Clause No.
The Article/Clause
Reasons for not adopting optional items
15.
There is no class and number of any convertible debt instruments, contractual securities, preemptive right or similar rights issued or granted by the Company during the fiscal year.
1.
Article 70 (optional)
16.
There are no conversion or subscription rights under any convertible debt instruments, contractually-based securities, warrants or similar rights issued or granted by the Company.
17.
There is no redemption, purchase or cancellation by the Company of any redeemable debt instruments and the value of such securities outstanding, whether listed securities purchased by the Company and those purchased by its affiliates.
Composition of the Risk Management Committee: "The Company's Board shall, by resolution therefrom, form a committee to be named the (Risk Management Committee). The Chairman and majority of its members shall be Non-Executive Directors. The members of that Committee shall possess an adequate level of knowledge in risk management and finance."
18.
There are no interests in any class of voting shares for anyone (except to the Board members and senior executives and their relatives) who have notified the Company with these interests, and any changes in these rights during the last fiscal year.
A description of waiving any salary or compensation by an arrangement or agreement with:
19.
A Director: (applicable): Mr. Sulaiman Abdulkadir Al Muhaidib (the Chairman of the Board of Directors), has donated his annual Board remuneration, attendance allowance, expenses allowance for the fiscal year 2020 of SAR 230,435 to support the Group's Employee Takaful Fund.
A senior executive of the Group: (not applicable).
The Board postponed the formation of a Risk Management Committee (RMC) until the infrastructure of the risk management department is completed, currently the risk management department was established under the leadership of a specialized Risk Management Officer and the Risk Management policy was approved by the Board. The Risk Management Officer is currently working with the departments, on Group and subsidiaries level, to enhance the role of the current risk department further and carry out the Risk Management role, activities, and procedures. In addition, the Company is using an external entity specialized in the Risk area. Also the Company is working on implementing a Governance, Risk and Compliance system across Savola Group to effectively enhance the participation of the Board and the Executive Management team in the risk management process to ensure a unified vision of the risks faced by the Group and its subsidiaries. The RMC will be formed by the Board after completion of the infrastructure of risk management department and whenever it deems necessary.
Savola Group Audit Committee Report
j) What has/has not been implemented of the CG regulations, CG procedure and effectiveness, and initiatives continued
for the year ended 31 December 2020
Article/
Introduction
No.
Clause No.
The Article/Clause
Reasons for not adopting optional items
2. Article 71 (optional)Competencies of the Risk Management Committee
The RMC has not been formed due to the above-mentioned reasons in No. (1).
3. Article 72 (optional)
Meetings of the Risk Management Committee: "The Risk Management Committee shall convene periodically at least once every 6 months and as may be necessary."
The RMC has not been formed due to the above-mentioned reasons in No. (1).
The Audit Committee of Savola Group was formed and its charter was adopted by a resolution issued from the General Assembly of shareholders according to the requirements of Articles (101) and (104) of the Companies Law. In line with article (104) of the Companies Law which states that, "The audit committee shall review the company's financial statements and the auditor's reports and notes and give its comments thereon, if any. Further, the audit committee must prepare a report including its opinion regarding appropriateness of the company's internal control system as well as the tasks it has carried out to the extent of its powers. The board of directors shall file sufficient copies of such reports at the company's head office at least twenty-one days before the scheduled meeting of the general assembly with a view to deliver a copy of such report to those shareholders who desire to obtain the same. The report shall be recited at the meeting of the assembly".
4. Article 95 (optional)Formation of a Corporate Governance Committee:
"If the Board forms a Corporate Governance Committee, it shall assign to it the competences stipulated in Article (94) of these Regulations. Such Committee shall oversee any matters relating to the implementation of governance and shall provide the Board with its reports and recommendations at least annually."
There is no standalone committee for Corporate Governance, however, to ensure and monitor the implementation of CG requirements, the CG role was added to the RNC responsibilities and duties and the committee charter was amended and approved by the AGM. Also the CG requirements are overseen and monitored by the Board of Directors and the top Executive Management, in addition, there is a CG and Compliance Department with qualified team members at the Group-level to monitor CG code implementation and compliance, ensure proper implementation of the Board's resolutions issued regarding CG and submit regular reports to the Board. In addition, the Board and CEO supervise the overall implementation and development of the governance code.
We are pleased to share with you Savola Group Audit Committee Report for the year 2020, prepared in line with the requirements of the Companies Law, the Regulations and Rules of the Capital Market Authority and the Committee's charter, and will be glad to answer any questions in this regard after reciting the summary of the report during the General Assembly Meeting.
1. Appointment
5. Article 32,The Board Meetings:
Item (b) (optional)
"The Board shall convene no less than four meetings per year, and no less than one meeting every three months."
The Board held 5 meetings during the year. However, the Board exceeded the "three months" period indicated in said article between two of its meetings, as no meetings were scheduled during that period based on the approved meeting calendar at the beginning of the Board office term.
Savola Group Audit Committee was appointed at the Extraordinary General Assembly Meeting No. (31), held on Wednesday, 8 May 2019 corresponding to Ramadan 3, 1440H, in line with the Companies Law Article No (101), which approved the formation of the Audit Committee and the charter describing its functions, responsibilities and guidelines, as well as remuneration of selected members for the new office term, beginning from 1 July 2019 to 30 September 2022. The Audit Committee includes in its membership Mr. Fahad Abdullah Al Kassim (Independent Board member), Dr. Abdul Raouf Banaja (Independent External member), Dr. Ammr Khaled Kurdi (Independent External member), Mr. Mohammed Ibrahim Al Issa (Non-Executive Board member) and Mr. Bader Hamad Al Rabiah (Independent Board member). In addition, the Board appointed Mr. Tareq Abdullah Al Garaawy based on the Remuneration Nomination Committee recommendation (as an Independent External member) effective from 6 October 2020 until the end of the current office term of the Audit Committee, which ends on 30 September 2022. The appointment of Mr. Tareq Abdullah Al Garaawy comes in the vacant seat after the resignation of Dr. Ammr Kurdi from the Audit Committee on 1 May 2020 due to his business commitments. However, Mr. Tareq Al Garaawy's appointment is not final until presented to the nearest General Shareholders Assembly Meeting for approval as per the regulations.
6. Article 87 (optional)Social Responsibility:
"The Ordinary General Assembly, based on the Board recommendation, shall establish a policy that guarantees a balance between its objectives and those of the community for purposes of developing the social and economic conditions of the community."
Savola has a clear policy and strategy in the field of CSR, which has already been approved by its Board of Directors.
2. Meetings
The Group has been very keen to implement such a strategy for many years. Moreover, CSR activities and initiatives are being disclosed in the annual Directors' Report as well as on the Company's website.
In line with its charter, the Audit Committee will convene periodically based on Chairman invitation, at least 4 times per year, and as may be necessary, and majority attendance of members constitute a quorum whether in person or by proxy. The Committee held 6 meetings during 2020 and the quorum for each meeting was reached. (All Audit Committee meetings held after the Pandemic spread in March 2020 were through video conference due to the precautionary measures to limit the spread of COVID-19).
3. Savola Group operating model
To ensure the sustainability of the CSR programs, Savola Group established the Savola World Foundation (a non-profit organization under the supervision of the Ministry of Human Resources and Social Development). The new foundation is currently fully funded by Savola Group. The Savola World Foundation is managed through a Board of Trustees in addition to the presence of a dedicated team to implement and oversee the CSR programs and initiatives. However, the CSR policy was revised, and the Board will present the said policy to the nearest Shareholders' General Assembly for approval.
The organizational structure "Operating model" adopted by the Group as a strategic investment holding company reflects the independence of the operational aspects of the Group's subsidiaries.
Conversely, all interaction between the Group's Audit Committee on one hand and its subsidiaries' Audit Committees on the other hand are governed by the Group's representation membership at the Audit Committees of the subsidiaries.
4. Audit Committee members' qualifications:
The schedule below describes current and previous positions, qualifications and experience of the Audit Committee members as follows:
No.
Member name
Current positions
Previous positions
Qualifications
Experience
Audit Committee members:
1.
Mr. Fahad Abdullah Al Kassim
2.
Mr. Mohammed Ibrahim Al Issa
Current and previous positions, qualifications and experience were mentioned earlier in the Director's Report.
3.
Mr. Bader Hamad Al Rabia
for the year ended 31 December 2020
NoMember name
Current positions
Previous positions
Qualifications
Experience
5. Audit Committee attendance:
The Audit Committee members' attendance for the meetings of the Audit Committee held during the year 2020 is listed below.
4.
Dr. Abdul Rauf Suliman Banaja
Holds number of memberships on boards and committees such as Audit Committee member in Herfy and other Joint Stock Companies.
Advisor to the Deputy Governor, the Saudi Arabian Monetary Agency (SAMA)PhD in Economics, University of California, Santa Barbara, United States, 1981
Assumed several positions in a number of local and regional banks.
Sr.
Name
29 Jan
16 Mar
29 Apr
24 Jun
12 Aug
28 Oct
Total
Economic Advisor, Ministry of Finance
1 Mr.Fahad Abdullah Al Kassim (Chairman)
√
√
√
√
√
√
6 of 6
(Independent, Savola Board member)
5.
Mr. Tareq Abdullah Al GaraawyHe is currently a member of several joint stock companies' Audit Committees.
Worked in several companies like Idfa Management & Financial Consultants, and Tatweer Buildings Company.
- Bachelor's degree in Accountancy from King Saud University in 1996.
- Master's degree in Accountancy from George Washington University, United States in 2002.
- A Certified Management Accountant, and a member of the Institute of Management Accountants (USA) as well as a member
Has more than 22 years' practical experience in financial, accountancy, compliance and consultancy gained from working with several banks such as, Saudi Investment Bank, Saudi British Bank and Bank Albilad.
2 Mr. Mohammed Ibrahim Al Issa (Non-Executive, Savola Board member)
√
√
√
√
√
√
6 of 6
3 Mr. Bader Hamad Al Rabia (Independent, Savola Board member)
√
√
√
√
√
√
6 of 6
4 Dr. Abdul Raouf Suliman Banaja (Independent, external member)
√
√
√
√
√
√
6 of 6
5 Mr. Tareq Abdullah Al Garaawy* (Independent, external member)
N/A
√
1 of 1
- Mr. Aly Asim Barakat (Committee Secretary)
√
√
√
√
√
√
6 of 6
Ex-member of Savola Group Audit Committee until 1 May 2020:
-Dr. Ammr Khaled Kurdi (Independent, external member)
√
√
√
N/A
3 of 3
of Institute of Internal Auditors.
Note: * Mr. Tareq Abdullah Al Garaawy was appointed by the Group Board as a member of the Audit Committee of the Savola Group (as an Independent external member) effective from 6 October 2020 until the end of the current office term of the Audit Committee, which ends on 30 September 2022. The appointment of Mr. Al Garaawy comes in the vacant seat after the resignation of Dr. Ammr Kurdi from the Audit Committee as of 1 May 2020 due to his business commitments.
Ex-member of Savola Group Audit Committee until May 1, 2020:
-Dr. Ammr Khaled KurdiCEO of Business Services at Saudi Industrial Investment Co. (Dusar)
• Chief Financial Officer at Saudi Arabian Amiantit Company.
• Chief Audit Executive at King Fahd University of Petroleum & Minerals.
• Bachelor's degree in Accounting from King Fahad University of Petroleum and Minerals in 2001.
• Master's degree in Accounting from the University of Arizona, United States, 2004.
• Ph.D. in Accounting, University of North Texas, United States, 2010.
Has extensive experience in a number of areas, including accounting, auditing, financial management, corporate governance, and risk management. In addition, he is an Audit Committee member for several Joint Stock Companies.
6. Audit Committee remuneration for 2020 (SAR):
Fixed Remuneration
Sr.
Name
Title
(Except for the allowance for attending meetings)Allowance for attending meetings
TotalOther expenses
1 Mr. Fahad Abdullah Al Kassim (Independent, Savola Board member)Chairman
150,000
30,000
180,000
2 Mr. Mohammed Ibrahim Al Issa (Non-Executive, Savola Board member)Member
150,000
30,000
180,000
Mentioned in the Board remuneration table
3 Mr. Bader Hamad Al Rabia (Independent , Savola Board member)Member
150,000
30,000
180,000
• Certified Management Accountant (CMA), and member of Global Board of Directors of the Institute of Management Accountants, United States.
4 Dr. Abdul Raouf Suliman Banaja (Independent, external member)
Member
150,000
30,000
180,000
-
5 Mr. Tareq Abdullah Al Garaawy (Independent, external member)Member (as of 6
35,462
5,000
40,462
-
October 2020)
Ex-member of Savola Group Audit Committee until 1 May 2020:
-Dr. Ammr Khaled Kurdi (Independent, external member)Ex- Member until May 2020
50,000
15,000
65,000
2,435
Total
685,462
140,000
825,462
2,435
for the year ended 31 December 2020
7. Summary of Audit Committee duties, responsibilities and achievements executed in 2020 a. Financial reporting
• Review and recommend to the Group's Board of Directors the approval of the preliminary quarterly results and year-end consolidated financial statements focusing particularly on the reliability of the information disclosed therein, changes in accounting policy, significant and unusual events, reasonableness of accounting estimates for significant issues, as well as compliance with accounting standards and other legal requirements.
The Group's External Auditors conducted their audit in accordance with international auditing standards adopted in Saudi Arabia which require that they plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. This resulted in providing an unqualified opinion on the Group's consolidated financial statements for the year ended on 31 December 2020.
Based on the results of the above mentioned procedures, the Group's Audit Committee believes that reasonable assurance was provided regarding the effectiveness of internal control procedures.
b.
Internal audit
• Review and approve the Group's internal audit department charter, plan and outputs and ensure whether the function has the necessary authority and resources to carry out its work while maintaining its independence.
However, we emphasize that due to the geographical spread of the Group's operations locally and regionally we cannot conclude exclusively on the comprehensiveness of the internal control procedures, as these procedures in substance, rely on selecting random samples as mentioned above.
• Review and assess Savola Group internal audit reports and monitor the tracking and follow-up of implementation process determining whether or not appropriate actions are taken in respect of the internal audit recommendations therein.
Accordingly the Audit Committees', at the Group and its subsidiaries, efforts are focused continuously to develop and improve the effectiveness and efficiency of the internal control procedures review mechanism in place across the Group and its subsidiaries.
c. External audit
• Review the External Auditors service delivery plan, scope of work, the results of the financial audits, the relevant audit reports and management letter together with management responses or comments to the audit findings.
Conclusion:
• Ensure that appropriate assistance was given by the Group's Executive Management team to the External Auditors and that no difficulties were encountered during the course of the audit, including any restrictions on the scope of activities or access to required information.
This report was prepared by the Audit Committee during the year 2020 in line with the regulatory requirements and the charter of the Committee and will be submitted to the General Assembly when the Board of Directors issue its invitation. The meeting will be held during the first half of 2021 (according to the dates approved by the regulatory authorities). The Committee is glad to answer all inquiries and questions of the shareholders - as stated in this report - during the General Assembly meeting of shareholders, and ALLAH is the guardian of success.
d. Related party transactions
• Review the results of External Auditors limited review of Savola related party transactions for 2020 included in the related party transactions report prepared by the Chairman of Board of Directors in relation to the related party transactions executed by the Company during the year and provide any recommendation to the Board based on the results, if any.
• Ensure that related party transactions are properly disclosed in the Board of Directors report and audited financial statements.
e. Impact of COVID-19
The spread of novel coronavirus (COVID-19) was confirmed in early 2020 which was characterized by the World Health Organization
(WHO) as a pandemic causing disruptions to businesses and economic activities in the geographies where the Group operates. In response to that, the Audit Committee is closely monitoring any material impact on the continuity of business activities and operations relating to any potential risks associated with interruptions to production facilities, supply of material, availability of inventory, and safety of employees to ensure the Group's management of an effective and timely response, as well as ensure adherence to the precautionary measures imposed by the respective authorities. Further, the Audit Committee reviewed the outcome of COVID-19 which had a limited impact on the Group's results for the year ended 31 December 2020.
f. Savola Integrity Hotline
Oversee the Savola Group whistleblowing reporting facility "Integrity Hotline" which captures and records matters raised by any stakeholders, including the Executive Management team, senior managers and employees (permanent, temporary and part-time), shareholders, trainers, clients, individuals, agency staff, consultants, suppliers and vendors.
8. Internal control mechanisms and its results at the Group:
The Executive Management of the Group and its subsidiaries certifies on an annual basis their responsibility for establishing and maintaining internal control procedures designed to provide reasonable assurance regarding the effectiveness and efficiency of operations, the reliability of financial reporting and compliance with applicable laws and regulations. The reasonable assurance provided by the signed internal control certifications is supported by the results of a questionnaire completed by all heads of functions across the Group and subsidiaries designed in line with the Internal Control-Integrated Framework published by Committee of Sponsoring Organization (COSO) of the Treadway Commission. The signed internal control certificates for 2020 were handed over and filed with the Group's legal counsel.
The Internal Audit Department at the Group and its subsidiaries execute the annual audit plan approved by the Audit Committee at the Group and its subsidiaries to evaluate the existing condition of internal control procedures focusing on the assessment of the control environment, organization's structure, risks, policies and procedures, segregation of duties and information systems. A random sample of activities within the planned audit area is selected with the objective of testing the effectiveness and efficiency of internal control procedures design and operation. All internal control recommendations resulting from the execution of annual audit plans are communicated to concerned management parties and followed-up by internal audit departments at the Group and its subsidiaries to support maintaining effective internal control procedures.
The Savola Group
Savola Tower
The Headquarters Business Park Prince Faisal Bin Fahd Road 2444 Taha Khusaifan, Unit 15 Ashati District
Jeddah 23511-7333 Kingdom of Saudi Arabia
Tel: +96612 268 7733 Fax: +96612 268 7828
www.savola.com
Attachments
- Original document
- Permalink
Disclaimer
SAVOLA Group Company SJSC published this content on 29 March 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 March 2021 07:32:06 UTC.
