SHL approves works and contracts concluded with related parties

The Board of Directors of SHL Finance Company announced on Monday to its respectable Shareholders the results of the General Shareholders meeting (First meeting). The results of voting on the assembly’s agenda were as follows:

1- The Board of Directors Report for the fiscal year ended 31st December 2023 was reviewed & discussed.

2- The Financial Statements for the fiscal year ended 31st December 2023 was reviewed & discussed.

3- Approval of the External Auditors Report for the fiscal year ended 31st December 2023 after discussion.

4- Approval on the absolving the members of the Board of Directors from liabilities for the fiscal year ended 31st December 2023.

5- Approval on the Board of Directors resolution on the appointment Mr. Mohammed bin Abdulrhman Al-Ghannam as independent member in the Board of Directors starting from the date of his appointment on 17th October 2023 up to the end of the current Board of Directors’ term on 27th November 2025 in replacement of the previous none executive Board member Mr. Othman bin Kheri Bader.

6- Approval on Board of Directors resolution on the appointment of Mr. Ibrahim bin Abdullah Aljasir as an independent Board member starting from 17th March 2024 up to the end of the current Board of Directors’ term on 27th November 2025 in replacement of the previous independent Board member Mr. Saud bin Abdulaziz Algussaiyer.

7- Approval on the distribution of remuneration for the Board members for total amount of (2,846,000) two million eight hundred forty-six thousand for the year ended 31st December 2023.

8- Approval on the distribution of remuneration for the Board Committees members for total amount of (2,057,000) two million fifty-seven hundred thousand for the year ended 31st December 2023.

9- Approval on the appointment of Deloitte & Douche – Baker Abu Al- khair & co. as the company’s auditor from among the candidates based on the Audit Committee recommendation to examine, review, and audit the financial statements for the second, third and annual financial statements for the year 2024, and the first quarter of the year 2025, with a total annual fee of SAR 945,000 (excluding the VAT).

10- Approval on delegating the Board of Directors to distribute Interim Profits on Quarterly or Semi-Annual basis for the year 2024.

11- Approval on the transactions and contracts made between the company and the shareholder, the Arab National Bank, which the Board member Mr. Obaid Abdullah Al Rasheed had indirect interest, related to the banking facilities (Islamic Tawarruq Financing) obtained from the Arab National Bank, with a total balance of 1.70 Billion Saudi Riyals as of December 31st , 2023, along with the consequences of these facilities such as burdens and costs in the amount of 117.3 Million Saudi Riyals during the same year and on the basis of the SIBOR of the bank’s profit margin, repayment of facilities will be on installments as per the Facility Agreements, and the contract is considered as continuous dealings which is subject to annual renewal and made in the ordinary course of the company business without any privilege conditions or terms.

12- Approval on the transactions and contracts, made between the company and the shareholder, the Arab National Bank, which the Board member Mr. Obaid Abdullah Al Rasheed had indirect interest, the company amortizes the previous balance on a monthly basis until the end of those contracts. The unpaid part of the commission, paid to the Arab National Bank, was amounted to 12.1 Million Saudi Riyals as of December 31st, 2023. The contract is considered as continuous dealings which is subject to annual renewal and made in the ordinary course of the company business without any privilege conditions or terms.

13- Approval on the transactions and contracts, made between the company and the shareholder, the Arab National Bank, which the Board member Mr. Obaid Abdullah Al Rasheed had indirect interest, related to service fees, representing the value of administrative services provided by SHL Finance Company related to real estate financing contracts, sold to the Arab National Bank during 2014, according to the asset sale agreement signed with the Arab National Bank. The inclusive service revenues during the year 2023 were amounted to 4.4 Million Saudi Riyals, net after deducting the costs of services, and the balance of service fees due from the Arab National Bank was amounted to 0.5 Million Saudi Riyals as of December 31st, 2023. The contract is considered as continuous dealings which is subject to annual renewal and made in the ordinary course of the company business without any privilege conditions or terms.

14- Approval on the transactions and contracts, made between the company and the shareholder, the Arab National Bank, which the Board member Mr. Obaid Abdullah Al Rasheed had indirect interest, related to fair value of derivative financial instruments and hedging profit, during 2022, the company signed an interest rate swap agreement to hedge its exposure to interest rate risk on financing contracts with a fixed profit cost by exchanging prices between the fixed interest paid monthly. The positive fair value of the interest rate swap as of December 31st, 2023, was amounted to 26.95 Million Saudi Riyals, with a nominal amount of 189 Million Saudi Riyals. Hedging revenue recognized in the profit/loss statement during the year, was 6.5 Million Saudi Riyals, that appear deducted from the facility cost, the contract is considered as continuous dealings which is subject to annual renewal and made in the ordinary course of the company business without any privilege conditions or terms.

15- Approval on the transactions and contracts, made between the company and the shareholder, the Arab National Bank, which the Board member Mr. Obaid Abdullah Al Rasheed had indirect interest, related to the Service Level Agreement for Sharia supervision during the year 2023. On January 1, 2022, the company signed a Service Level Agreement (SLA) with the Arab National Bank regarding assigning the tasks of Sharia Compliance and Sharia Audit, for two years, at an amount of 10 Thousand Saudi Riyals monthly. The contract is considered as continuous dealings which is subject to annual renewal and made in the ordinary course of the company business without any privilege conditions or terms.

16- Approval on the transactions and contracts, made between the company and the shareholder, the Arab National Bank, which the Board member Mr. Obaid Abdullah Al Rasheed had indirect interest, , related to Credit-Sales (Murabaha Deposits), during the year 2023, the company signed Credit-Sales (Murabaha Deposits) agreements with the Arab National Bank, as part of the company’s strategy for the optimal use of available cash, as the outstanding balance of Credit-Sales (Murabaha Deposits), as of December 31st , 2023, the realized deposit profits, for the year, were amounted to 23K Saudi Riyals. The contract is considered as continuous dealings which is subject to annual review and renewal and made in the ordinary course of the company business without any privilege conditions or terms.

17- Approval on the transactions and contracts, made between the company and the shareholder, Dar Al Arkan Real Estate Development Company, which Board member Mr. Yousef Abdullah Al Shalash had indirect interest, relating to financing some of Dar Al Arkan customers to purchase residential units, and during the year 2023 the total value of the residential units purchased from Dar Al Arkan Real Estate Development Company and financed to customers was amounted to 3.8 Million Saudi Riyals. The contract is considered as continuous dealings which is subject to annual renewal and made in the ordinary course of the company business without any privilege conditions or terms.

18- Approval on the transactions and contracts, made between the company and the shareholder, Tharawat Real Estate Assets Company, which the Board member Mr. Yousef bin Abdullah Al Shalash, has an indirect interest, and these amounts are represented in the rental value for offices space Nos. (004/103/104/303/304) rented by the company’s Head Offices in Madarat Towers, located in Riyadh, Al-Wazarat district, with a total area of 1961 M2, according to the agreement signed between the company and Tharawat Real Estate Assets Company on 01/01/2020. The rents paid for the year 2023, were amounted to 2.18 Million Saudi Riyals. The contract is considered as continuous dealings which is subject to annual renewal and made in the ordinary course of the company business without any privilege conditions or terms.

19- Approval on the transactions and contracts, made between the company and Wasalt Real Estate Services Company, in which the Board member Mr. Youssef bin Abdullah Al Shalash, has an indirect interest. Whereas, on 01/07/2022, the company signed an annual real estate marketing services agreement with Wasalt Real Estate Services Company, in order to attract clients and finance them through the Company. The commissions paid to Wasalt Real Estate Services Company during the year 2023, were amounted to 0.11 Million Saudi Riyals. The contract is considered as continuous dealings which is subject to annual renewal and made in the ordinary course of the company business without any privilege conditions or terms.

20- Approval on the transactions and contracts implemented between the company and Quara Digital for Technical Support Services, in which the Board member Mr. Youssef bin Abdullah Al Shalash, has an indirect interest to provide technical support to the company during the year 2023. Whereas, on 22/08/2022, the company signed an annual Technical Support Services Agreement with Quara Digital. The fees paid to Quara Digital were amounted to 0.17 Million Saudi Riyals. The contract is considered as continuous dealings which is subject to annual renewal and made in the ordinary course of the company business without any privilege conditions or terms.

21- Approval on the transactions and contracts, made between the company Al Khair Capital, which the Board member Mr. Yousef Abdullah Al Shalash had indirect interest, related to Credit-Sales (Murabaha Deposits), during the year 2023, the company signed Credit-Sales (Murabaha Deposits) agreements with the Al Khair Capital, as part of the company’s strategy for the optimal use of available cash, as the outstanding balance, of credit-sales (Murabaha Deposits), as of December 31st , 2023, was amounted to 31.1 Million Saudi Riyals, and the realized deposit profits were amounted to 1.1 Million Saudi Riyals. The contract is considered as continuous dealings which is subject to annual renewal and made in the ordinary course of the company business without any privilege conditions or terms.