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SME Governance Assessment Tool WORKSHEET
Question Response/Comment Source
A1. Commitment/Basic level
A1.1 Are the basic formalities in place?
Board of Directors Yes
Annual Shareholders’ Meeting Yes
Shareholders identified and Yes
recorded
Yes
Charter or Articles of
Incorporation
A1.2 Is there a clear division of
responsibilities and authorities Yes
between management and the
Board?
A1.3 Are the core functions in the
company identified (accounting, Yes
legal, admin, IT)?
A1.4 Does the company have documented
strategic plans and budgets (1-3 No
years)?
A1.5 Is developing governance structures
somebody’s responsibility? Yes
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Question Response/Comment Source
A2. Commitment/Advanced level
A2.1 Does the company have the following
in place
Code of Ethics Yes
Code of Conduct Yes
Written CG code Yes
Yes
Officer responsible for
compliance
Annual calendar of corporate Yes
events (Board meetings,
Shareholders’ meetings)
Terms of reference for key Yes
positions
Core processes documented
Does the (family owned)
company have a succession plan
A2.2 What steps has the company taken
to improve its governance standards
or practices?
A2.3 Does the company have a Corporate Yes (Board secretary) P88
Secretary?
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Question Response/Comment Source
B1 Board and decision making /Basic
level
B1.1 A. Are Board Meetings held Yes
according to a regular schedule?
B. How many times per year did the 12 times
Board meet (on average) during
the last 2 years?
C. Are the agenda and supporting Yes
material sent to board members
well in advance?
D. Who prepares the agenda
for Board meetings?
B1.2 Does the Board have the appropriate Yes
mix of skills?
B1.3 Do the members of the Board Yes The responsibilities of the Board include setting the Company’s
understand what is their role and strategic aims, providing the leadership to put them into effect,
responsibilities? supervising the management of the business and
reporting to shareholders on their stewardship. P87
B1.4 Does the Board discuss the long-term
strategy of the company and the Yes
major material risks?
B1.5 How are the Board members
chosen? Is the director nomination By shareholders Yes
based on some set of eligibility
requirements?
B1.6 A. Are adequate minutes of Board Yes
and committee meetings
prepared?
B. By whom?
C. How are decisions communicated By reports and an app
to shareholders?
D. Are the Board minutes distributed YES
to Board members in a timely
manner?
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Question Response/Comment Source
B2 Board and decision
making/Advanced level
B2.1 A. Is there a mandatory rotation of No
Board members?
B. Have there been changes in the Yes
composition of the Board in the
last 3 years?
Do Board members receive an No
B2.2 induction and regular training?
B2.3 Does the company have an No
established succession plan for the
CEO and key positions?
B2.4 Does the Board discuss, on an Yes
annual basis, its performance as a
team?
C1 Control Environment and
Processes / Basic level
C1.1 Do the head of internal audit (in- Yes
house or outsourced) and the
independent external auditors report
directly to the Board (or the audit
committee, if created)?
C1.2 Are there aspects of the company’s Yes
business that call for special attention
to the control environment, including
risk management (incl. IT security),
internal controls, internal and external
audit, and compliance (including
environmental and other regulatory)?
C1.3 Does the company provide Yes
information to the investors about
how the risks are identified and
managed?
C1.4 Are the internal controls and auditing Yes
system periodically reviewed by the
independent external auditors?
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Question Response/Comment Source
C1.5 A. Do the external auditors prepare Yes
an annual “management letter”
with observations and
suggestions regarding areas for
improvements in the company’s
accounting and controls?
B. Is such document shared with the
Board (or the audit committee, if
established)?
C1.6 Are there policies in place governing Yes
how the audit firm is selected?
D1 Transparency and Disclosure /
Basic level
D1.1 Are adequate accounting and yes These Consolidated Financial Statements have been prepared in
auditing systems in place? accordance with International Financial Reporting
Standards (“IFRS”) as endorsed in the Kingdom of Saudi Arabia
and other standards and pronouncements that are
issued by Saudi Organization for Chartered and Professional
Accountants (“SOCPA”)
D1.2 Are semi-annual financial reports Yes
prepared by internal accounting?
Who receives them?
D1.3 A. Are (annual) financial statements Yes : PWC Independence
audited by an external audit We are independent of the Group in accordance with the code of
company? professional conduct and ethics, endorsed in the
Kingdom of Saudi Arabia, that are relevant to our audit of the
consolidated financial statements and we have fulfilled
B. Are they approved by Annual Yes our other ethical responsibilities in accordance with these
Shareholder’s Meeting? requirements. (See also page 112)
D1.4 Are financial statements prepared Yes
and disseminated to the shareholders
in a timely manner?
D1.5 A. Are financial statements prepared Yes Same source as D 1.1
in accordance with a widely
accepted, internationally
recognised system of accounting
(IFRS or US GAAP)?
B. For how many years have they Not mentioned
been prepared as such?
C. Was there a recent change in Yes See page 137
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accounting policies?
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Question Response/Comment Source
D1.6 Does the company comply with all Yes Almarai seeks to provide accurate, regularly updated
local (including non-financial) information to all its stakeholders and other interested
parties. The Company publishes and regularly updates
disclosure requirements including
information about corporate structure and operations,
yearly remits/licenses? partners, investments, other commercial activity and
performance related information PAGE 112
D1.7 Are shareholders provided with Not mentioned
information upon their request?
D2 Transparency and Disclosure /
Advanced level
D2.1 Is the audit performed by an Yes Page 124
independent and respected firm?
D2.2 Did the audit of annual financial Yes
statements give a qualified opinion?
D2.3 For how many years has the Yes
company had the same audit firm?
Do accounting policies contain a
periodic audit firm rotation
requirement?
Has there been a change in audit firm
not brought about by company audit
rotation requirement?
D2.4 Does the company provide a Yes
management discussion letter to
shareholders and lenders, discussing
forward looking issues (e.g.,
risks/opportunities, CSR practices)
and a discussion letter analysing
financial results and performance for
the previous period?
Does the company disclose related Yes
D2.5 party transactions (transactions with
its shareholders/shareholder owned
companies or its own
subsidiaries/affiliates)?
D2.6 Does the company have Yes
confidentiality policies in place
concerning management and
business information?
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Question Response/Comment Source
D2.7 Is governance related information Yes
provided on the website?
E1 Shareholders’ role / Basic Level
E1.1 Is ultimate beneficial ownership Yes
disclosed?
E1.2 Is there a shareholders agreement No
(SHA) in place?
E1.3 Are there any arrangements (among Yes
the shareholders/family/directors/
lenders) that generate a disproportion
between ultimate beneficial
ownership and voting/control rights?
E1.4 Is it expected that one or more of the Yes
equity partners will also be lenders to
the company?
E1.5 Are there any special rights of No
lenders?
E1.6 Who has the power to call for a Board of directors or 5% detendent of shares The General Assembly is the highest power in the Company,
shareholders meeting? with sole authorities including: the appointment
and termination of Board Members, approval of the
Consolidated Financial Statements, appointment of
the Audit Committee and the external auditor and
E1.7 Does the company convene/plan to Yes, The Company has adopted an electronic voting system to Almarai allows maximum participation by shareholders at
convene shareholder meetings with make it easier for shareholders to exercise their right of General Assembly Meetings and is keen to ensure that the
voting if they are unable to attend in person choice of time and venue enables full participation. The
agenda and explanatory material
Company has adopted an electronic voting system to
provided sufficiently in advance for make it easier for shareholders to exercise their right of
adequate consideration by voting if they are unable to attend in person
shareholders?
E1.8 What is the frequency of shareholder 2 times a year
meetings?
E2 Shareholders’ role / Advanced
Level
E2.1 Yes
Are all shares of the same class
treated equally?
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Response/Comment Source
Question
E2.2 Are there any tag-along and/or drag No
along rights?
E2.3 Are Shareholders meetings well- Yes
organized and do they function
effectively to allow for adequate
shareholder participation in key
governance decisions of the
company?
E2.4 In the period between the Yes
shareholders meetings, are all
shareholders/lenders kept abreast of
company policy, strategy, and
results?
E2.5 Does the company have a Yes
mechanism for dispute resolution?
E2.6 Does the company have a formal Yes P83
dividend policy? If not, how are
dividends determined and paid?
E3 Family Governance (if applicable)
E3.1 Has the family company developed
key family governance policies like
family employment, dividend policy
and a family protocol (constitution)?
E3.2 How are/ will the policies mentioned
above be communicated to family
members and others?
E3.3 How can family members convey
their ideas to the promoters and
company governing bodies?
E3.4 Has the family succession plan been
developed and adopted?
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Attachment: Board of directors’ composition
Name/gender Age Year of Tenure Type: Shareholder, Role Years of Experience Background Committee Remu
(Mr., Ms.) first in the ID, family in the association (industry) membership nerati
1
appoint- board NED, member, Board with the (Name, Role on2
ment ED, close friend? (Ch/M) company/ – Ch/M)
ND (FM/CF/SH) group
1
For the purpose of this document: a number of years the person stayed connected to the company or a group by being an employee, director, consultant, advisor etc.
2
Please explain the structure of the remuneration. It could be: sitting fee, monthly payment, annual payment, commission, other.
