Turning Challenges into Opportunities
Annual Report 2020 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 Total Assets Increase Our Food Investments Financial Highlights In 2020, our total assets 43% of Group Revenue increased by 1.5% to 08 Year in Review SAR 27 billion. 11 Turning Challenges into Opportunities 12 Investment Case 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’ 43%
Our Retail Investments 57% of Group Revenue 14
Best Workplaces Ranked 17th in this year’s ranking of Saudi Arabia’s Best Workplaces.
17 57%
Our Campaign Against Our Investment Proposition COVID-19 With over 40 years track record We launched a national of business growth, we offer a campaign to help reduce the unique investment proposition impact of the virus on the people and a diversified portfolio of of the Kingdom popular consumer brands in the food and retail sectors.
Savola is a key contributor to the Kingdom’s food security.
2 The Savola Group Annual Report 2020 3 OVERVIEW
At a Glance Group Revenue 43% Food Investments STRATEGIC REVIEW A Leader in 57% Retail Food and Retail Investments DIRECTORS’ REPORT Savola is one of the leading strategic investment holding Since 1979, Savola has built a reputation for creating “Value Built on Values” through our companies in the MENA (Middle East and North Africa) Region, diverse and expanding portfolio of investments in leading food and retail companies. with a portfolio of leading brands in the food and retail sectors. 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. FINANCIAL STATEMENTS 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.
3 2 4 1
1 Saudi Arabia Our Food Investments Our Retail Investments Panda Stores: 201 Our food vertical is made up of a portfolio of investments in Our retail vertical is headed by Panda Retail, the largest Herfy Stores: 388 large, branded categories across the MENA region. Savola modern grocery chain in Saudi Arabia with a total of 205 Foods is a leader in basic branded consumer packaged goods, stores (including 4 stores in Egypt), serving more than 100 2 which are produced in more than 8 countries and exported to million customers annually. Panda boasts a proud history, Egypt Panda Stores: 4 over 50 markets. We are proud to say that many of our a leading market share and formidable geographic reach. products are market leaders in their respective categories. Our long-term strategic investment in the retail sector 3 Through our commitment to strategic growth, we continue to innovate in our markets, build on our range of established consists of a 49% shareholding in Herfy Food Services Kuwait Herfy Stores: 8 products and diversify into higher-value items. Company. As such, we remain the largest shareholder in Herfy, one of the leading restaurant, industrial bakery and
4 Our long-term strategic investments in the food sector also meat processing businesses in Saudi Arabia. generate profits for our shareholders. We are the largest Bangladesh Herfy Stores: 4 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.
Major / Manufacturing Markets Export Markets Ownership of Ownership of Ownership of Ownership of Ownership of Savola Foods Almarai Al Kabeer Panda Retail Herfy Saudi Arabia Angola Ethiopia Libya Oman Spain Company Egypt Bahrain France Madagascar Pakistan Sudan Algeria Benin Germany Malawi Palestine Sweden Sudan Burundi Ghana Mali Rwanda Syria 100% 34.52% 51% 98.87% 49% Morocco Cameron Jordan Mauritania Senegal Tanzania UAE Canada Kazakhstan Mauritius Sierra Leone Uganda Others Comoros Kenya Morocco Somalia United Kingdom Congo Kuwait Mozambique South Africa USA Djibouti Lebanon Netherlands South Korea Yemen Eritrea Liberia North Macedonia South Sudan Others
4 The Savola Group Annual Report 2020 5 OVERVIEW
Through the sound execution of our corporate strategy and With positive revenue and profitability across most of our Strategic and Financial Highlights dedication of our entire workforce during this historically businesses, we are now in a solid position to invest capital challenging year, we succeeded in continuing the positive growth into new categories within Food and Retail to complement our trends established in the previous year with regards to both the top current portfolio. We have also established a venture capital and bottom lines. program to actively explore acquisitions in disruptive companies and technologies to fuel future non-organic growth related to our STRATEGIC REVIEW Sales revenue for Savola rose 1.4%, from SAR 21.4 billion in 2019 to core sectors. Positive Performance reach SAR 21.7 billion this year. This growth was the result of strong contributions mainly from our retail investments. 2020 witnessed In the year ahead, we will remain agile and focused, responding Panda Retail’s revenue increasing by 9%, Savola Foods Company’s to evolving market dynamics while seeking to accelerate the revenue decreasing by 6% and Al Kabeer Group’s revenue positive momentum and stimulate further growth to create and Profitability increasing by 18.8%. 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, DIRECTORS’ REPORT 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 Gross Profit Total Assets FINANCIAL STATEMENTS deliver a robust financial performance across our portfolio of SAR million SAR million leading food and retail companies in 2020. Despite the 4,640 27,058 widespread social and economic restrictions of the COVID-19 3% 1.5%
pandemic across the Kingdom and our geographic footprint, 4,653 4,504 4,640 26,658 27,058 4,394 25,287 23,337 Savola achieved revenue growth and a significant increase in 3,898 22,252 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.
2016 2017 2018 2019 2020 2016 2017 2018 2019 2020
Revenue Net Profit Shareholders’ Equity Capital Expenditure SAR million 21,702 SAR million 911 SAR million 8,232 SAR million 463 1.4% 91.5% 8.5% 24.1%
26,331 1,026 8,829 1,265 911 8,217 8,232 23,830 7,590 21,815 21,406 21,702 7,127
476 673
463 -363 -520 394 374
2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020
6 The Savola Group Annual Report 2020 7 OVERVIEW
Year in Review 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 STRATEGIC REVIEW Strategic Milestones stakeholders across the Kingdom. in 2020 DIRECTORS’ REPORT
28 OCTOBER New CEO appointed FINANCIAL STATEMENTS
Mr. Waleed Khalid Fatani was named Savola’s new Chief Executive Officer, 12 APRIL 16 JUNE 10 JANUARY effective 1 January 2021, following the Panda enters Forbes names Savola in resignation of Eng. Anees Ahmed Moumina. Savola’s Board of Directors Launch of Savola 7 APRIL eCommerce space ‘Top 100 Companies in extended its sincere thanks and World Foundation appreciation to Eng. Anees Ahmed Savola among ‘Best with PandaClick Middle East 2020’ Moumina for his commitment, dedication Savola transformed our flagship CSR Workplaces in Saudi PandaClick, a new ecommerce platform A leading business and financial and hard work exerted during his office program Savola World, from a 1 MARCH for grocery purchases and deliveries from publication, Forbes Middle East Magazine, term, which ended on 31 December department into a standalone private Arabia’ for 2020 Panda, was launched to provide ranked Savola 14th th 2020. The Board of Directors welcomes foundation, called Savola World in Saudi Arabia and 39 ‘One Family’ event customers across the Kingdom with a Mr. Waleed Khalid Fatani and wishes him Foundation. The new non-profit A testament to our commitment to in the Middle East based on market value, quick and convenient way to shop for good luck in his new role. organization will extend the Group’s raises awareness creating a positive, diverse and engaging sales, assets and profits in its annual list of their favorite brands with just a few clicks, Sustainability and CSR programs, under and support for workplace for all our employees, Savola Top 100 companies in the region. was ranked 17th in this year’s ranking of at home or on the move. the supervision of the Ministry of Human productive families Resources and Social Development. Saudi Arabia’s Best Workplaces, in the community published by leading global workplace culture authority Great Place to Work® In line with the Kingdom’s 2030 Vision Middle East. and the Company’s active social 19 APRIL 13 SEPTEMBER DECEMBER engagement strategy, Savola sponsored and supported Saudi productive families ‘Our commitment is Savola buys back Establishment through a special community event at our duty’ campaign SAR 16.5 million of Savola Venture Savola Tower. The 3 day event held against COVID-19 worth of shares Capital Program under the slogan ‘One Family’, brought together Savola employees with As part of our multi-faceted pledge to As part of the Company’s efforts to attract Savola launched a new investment productive families from the community, protect and serve our community, Savola and retain key talent and to motivate staff program to co-invest in disruptive offering them a great platform to sell launched the widespread ‘Our to strengthen their performance, Savola technologies in the food and retail their homemade products and interact commitment is our duty’ national bought back 341,675 of its shares for more technology spaces with best-in-class directly with customers in a lively and campaign. The successful campaign than SAR 16.5 million (USD 4.4 million). investment partners. It seeks smart positive environment. engaged hundreds of thousands of The transaction forms the first tranche of acquisitions that serve this purpose to individuals across a wide range of social the Company’s long-term incentive achieve inorganic growth in order to platforms, to help reduce the impact of program (LTIP) for its employees. It has support its core business activities. As a COVID-19 on the people of the Kingdom. also reallocated shares to eligible part of this program, Savola aims to employees, according to the program’s capitalize on rapidly changing consumer approved policy and standards. trends regionally and globally over the coming 3 to 5 years.
8 The Savola Group Annual Report 2020 9 OVERVIEW
Year in Review
Safeguarding Savola and Our Turning Challenges STRATEGIC REVIEW Stakeholders Against COVID-19 into Opportunities DIRECTORS’ REPORT
2020 was a year like no other. The COVID-19 Savola responded with immediate, large-scale and pandemic had an immediate and transformational well-coordinated action. We leveraged our resources Savola was resilient in adapting to the challenging economic and impact across our local and international markets, and capabilities – our financial muscle, our putting the physical and mental health, as well government and corporate relationships, our central operational landscape during 2020, leveraging our strengths to as the social and economic welfare, of our role in complex and dynamic food and retail supply maintain our strategic focus and support and sustain our diverse employees, customers, suppliers, partners chains, and our position at the heart of the many FINANCIAL STATEMENTS and communities under pressure. communities we serve – to protect and work for the stakeholder ecosystems throughout the year. health, security and best interests of our stakeholders.
For our For our For our For our For our Health Digital transformation employees customers suppliers communities shareholders We prioritized the physical health and mental We took immediate action to engage and wellbeing of our 24,000+ employees through a support our customers, accelerating our digital wide range of actions and investments, raising transformation and automation, bolstering our awareness and ensuring alignment with all logistics and distribution networks and • Remote work • Ensuring food • Identification of • SAR 10 million in • Held Annual government regulations and requirements, whilst launching Panda’s new eCommerce platform. policies and security in the critical elements donations for General Meeting empowering them to ensure that our Group and support Kingdom by of supply chain COVID-related (AGM) virtually, operating companies would remain operational increasing stock to ensure causes through enabling our and capable of fulfilling our promises to our customers, community and nation. • Diverse of products in robustness initiatives by shareholders to precautionary shops, ensuring Panda and Savola participate in the measures in HQ food availability • Close monitor World meeting through a and offices, and price trends and mobile app including regular assurance restriction to • Various health checks, enable agile community • Recommended to Profit and growth Community Responsibility temperature • Creating new adaptation as awareness increase 2020 We did not stop investing in our turnaround or We doubled down on our position at the heart reading and channels to needed campaigns dividends the strategy that will shape the future of our of our communities and our critical food security sanitization of access products, significantly over Group, delivering solid returns for our role across our markets, ensuring supply of facilities such as • Frequent digital • Ensuring social 2019 shareholders while launching a venture capital goods during the darkest days of the pandemic PandaClick communication distancing for program for disruptive investments in food and while reinforcing our long-term commitment to • Promoting and collaboration health and safety • Increased frequency retail to continue to enhance our portfolio and sustainable social impact by establishing Savola increased health • Transparent and with key in Savola of investor unlock avenues for future growth. World Foundation. and safety frequent suppliers to add premises engagement awareness communications inventory buffers through a range of through mass as needed virtual channels communications • Full health and and training safety measures • Participation in in shops various investor conferences held by leading regional and A strong organization international The strength of our strategy and pride of our people were fundamental to the Company’s capacity to overcome obstacles financial institutions 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.
10 The Savola Group Annual Report 2020 11 OVERVIEW
Investment Case STRATEGIC REVIEW
A Unique Investment DIRECTORS’ REPORT Proposition
A leading Saudi investment A REGIONAL CONSUMER UNDERSTANDING SUCCESSFUL TRACK FINANCIAL STATEMENTS holding company with LEADER IN FOOD AND UNIQUE MENA RECORD OF DYNAMIC diverse investment AND RETAIL FOOTPRINT CAPITAL ALLOCATION portfolios of the largest assets and brands in the food production, marketing, distribution SAR 22 billion 200+ stores Unique investment model One of the largest food and retail players in the region with Dominant retail footprint with 200+ Panda and HyperPanda Unique investment holding business model that allows for and retail sectors, providing an annual turnover of over SAR 22 billion stores in 40+ cities across the Kingdom, with 100+ million strategic investments and value creation in the MENA our shareholders with annual transactions and the largest logistics network in consumer food and retail space Forbes Top 100 Saudi Arabia exposure to favorable Ranked 14th in Saudi Arabia and 39th in the Middle East in Experienced leadership demographics and Forbes Middle East’s annual list of Top 100 companies in Serving 400+ million potential Experienced leadership team with clear mandate to deploy the region customers and/or reallocate capital to enhance shareholder returns through investments in consumer segments with long-term structural trends in the Direct manufacturing and distribution strength in more than growth potential #1 Staple food business 8 countries, with 14 facilities serving a combined population regions we operate in. #1 basic food business in MENA, Savola has market leading of more than 400 million positions and brands across consumer staples and value-added 40+ years ranges, such as edible oils, sugar, pasta and frozen food Attractive exposure 40+ year track record of business growth, active capital reallocation and long-term investment horizon Attractive exposure to large and growing population base #1 Grocery retailer with favorable demographics - more than 50% below the #1 grocery retailer in Saudi Arabia, Panda has strong brand age of 35 years. Sustainable growth equity and over 28% market share in the attractive and Actively exploring multiple venues of investments in food under-penetrated modern retail space of the GCC’s largest Extensive knowledge and retail to help drive sustainable growth for the Group for market years to come Extensive consumer, market and brand knowledge, successfully leveraged to launch, grow and maintain market- Largest shareholder leading positions and products (e.g. Afia, Al Osra, etc.) Largest shareholder in 2 leading Saudi consumer brands, Almarai and Herfy, as well as popular frozen food Customer-centric brand, Al Kabeer 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
12 The Savola Group Annual Report 2020 13 Strategic Review
16 Chairman’s Statement 18 Board of Directors and Gross Profit Almarai Member Classification Savola Group’s gross profit for Almarai preserved its 2020 stood at SAR 4.6 billion – leading market share 20 Group CEO’s Message 3% higher than 2019. across multiple 22 Executive Management segments, registering 24 Our Strategy and Business Model growth across dairy, bakery and poultry. 26 Our Journey 28 Food Investments 38 Retail Investments 3% 46 Our People 4,640 52 CSR and Sustainability 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 13% market share of total flagship El Maleka brand leads grocery retail in Saudi Arabia. the packed pasta segment in Egypt, accounting for more than 40% of the market in 2020. 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). Savola leveraged its considerable reach and strength in 2020 to contribute to supporting the community by ensuring the supply of essential goods 400 for households across the nation throughout the COVID-19 crisis.
14 The Savola Group Annual Report 2020 15 OVERVIEW
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. STRATEGIC REVIEW Strengthening the Kingdom’s Food Security DIRECTORS’ REPORT
A Leader in Corporate Governance Enhancing our Social Responsibility Acknowledgements By converting the challenges of Savola remains at the forefront of our market The central role of sustainability in our On behalf of the Board of Directors, I would 2020 into opportunities, we have in terms of corporate governance. This is business, and our multiple initiatives to like to welcome our new CEO, Mr. Waleed
exemplified by our commitment to create a more socially and environmentally Khalid Fatani, under whose fresh direction FINANCIAL STATEMENTS not only successfully navigated enhancing corporate value by ensuring the responsible company, testify to our and leadership we aim to deliver great Group fulfills its commitments to its commitments to building stronger, healthier progress toward our strategic goals in the a complex environment but shareholders, employees, communities communities and a cleaner natural coming years. I would also like to thank our and other stakeholders. environment. former CEO, Anees Moumina, for his also charted a course toward leadership and dedication to our collective continued growth and success. Our leadership in this field is enabled by our In line with international developments in the success. effective corporate governance framework, field of corporate foundations, Savola regular interactive communications with all formalized this mission by transforming its I wish to convey the Board’s appreciation to stakeholders and the implementation of flagship CSR program, Savola World, into a the Saudi government, our shareholders and best practices. These efforts have received standalone private foundation. The Savola our stakeholders for their continued support national recognition; Savola has been World Foundation is a non-profit and trust in Savola. I would also like to thank ranked among the top 10 non-financial organization under the supervision of the our hard-working employees across our As a market leader in food and retail, We have remained true to our commitments Investing in Disruptive Technologies sector companies traded on the Saudi Stock Ministry of Human Resources and Social extensive footprint and our dedicated Savola has leveraged its considerable to the people, contributing to the Ministry of In 2020, Savola created a new investment Exchange, Tadawul, in the Corporate Development in Saudi Arabia; this status Executive Management in Saudi Arabia and supply chain strength to support the Health’s efforts to combat the COVID-19 program aimed at capitalizing on global Governance Index (CGI) issued by the enables the Foundation to champion more abroad for delivering exceptional government, the nation and its people by crisis and doing our part to ensure food consumer trends by co-investing in new, Corporate Governance Center at Al Faisal effectively its sustainability and social performance throughout 2020 and for ensuring the supply of essential consumer security for the people and communities. disruptive technologies in food and retail. University. development initiatives, including those playing a critical role in keeping us on track goods throughout the global COVID-19 This includes a new framework designed to which reflect the objectives of Saudi Arabia’s to realize our strategic goals in the face of Our considerable presence in the food and pandemic. True to our robust strategy, we ensure investments remain focused on key Vision 2030. the challenges presented by the pandemic. retail spaces has empowered us to work Launching a long-term employee have also succeeded in turning the objectives related to shareholder value and closely with our full ecosystem of suppliers incentive program challenges of the year into opportunities for returns while also enhancing the Through the Foundation, we continue to As we look to 2021 and beyond, Savola will and partners to play a critical role in the In order to attract and retain exceptional growth and development, benefitting our technological capabilities of the Group’s deliver lasting change both for our people remain focused on securing increasing value continued supply of essential goods, despite talent, we have repurchased shares worth investors with higher returns while also operating subsidiaries. and for the wider communities among which for our people, communities, investors and serving our many customers and the difficult conditions imposed by the more than SAR 16.5 million (USD 4.4 million) we operate. As part of our COVID-19 other stakeholders; whilst also capturing the communities more effectively. pandemic. The ultimate goals of the program are to during 2020. They will be kept as treasury response, we dedicated a total of SAR 10 benefits of innovative technologies to power better understand trends among the shares within the framework of the first million to initiatives during 2020, including our growth and success. By adapting our services to meet this new In the face of the extensive disruption younger generations who will drive our tranche of our long-term incentive program through our support for the Kingdom’s reality, as well as implementing new caused by the COVID-19 pandemic in 2020, business going forward; tilt our existing (LTIP). We have also allocated them to Health Endowment Fund. We also produced technological solutions and maintaining we have safeguarded both our people and portfolios in a proactive manner; and allow eligible employees, according to the a series of awareness videos that went viral robust supply lines, we are well positioned to our profitability by proactively adapting to us to position Savola at the leading edge of approved policy and standards of the on a number of social media platforms, continue to safeguard the Kingdom’s food Sulaiman A. Al Muhaidib the current situation whilst also maintaining technology and innovation through the program, which we expect will continue to aimed at building collective public awareness security as the nation maintains its ongoing Chairman the essence of our robust and coherent development of selected partnerships and achieve the desired goal over the coming with regard to measures to prevent the stand against the pandemic. strategy. smart acquisitions. years. spread of the virus, and became one of the first organizations in Saudi Arabia to adopt By converting the challenges of 2020 into the newly introduced Saudi National opportunities, we have not only successfully Sustainability Reporting Standards. navigated a complex environment but also charted a course toward continued growth Our CSR activities also serve to increase our and success. 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.
16 The Savola Group Annual Report 2020 17 OVERVIEW
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 STRATEGIC REVIEW
Board Chairman Board Vice-Chairman Board Member Board Member Board Member Board Member Non-Executive Non-Executive Non-Executive Non-Executive Independent Independent
Current positions: Chairman of the Board of Current positions: CEO of Assila Investments, Current positions: Managing Director of Current positions: CFO of Assila Investments, Current positions: Vice-Chairman and CEO of Current positions: Chairman of Amwal DIRECTORS’ REPORT Abdulkadir Al Muhaidib & Sons, and Board Chairman of Savola Foods Company, Al Muhaidib & Sons, and Board Member of and Board Member of Kinan International Real Noor Al Salhiya Real Estate, Board and Audit Financial, and Executive Board Member of Al Member of Almarai, Rafal Real Estate, Al Managing Director of Almarai, and Board several companies. Estate Development. Committee Member of Mezzan Bank, Member of Rajhi United Investment. Muhaidib Holding, ACWA Power Vision Invest, Member of several companies. the Board and Audit Committee and Chairman of Previous positions: A number of managerial Previous positions: Head of Balance Sheet Previous positions: CEO of Amwal Financial and many other companies. the Risk Management Committee of Noor Previous positions: CFO of Assila Investments, positions, leadership roles and Board Management and Investment at Saudi British Consultants, General Manager of Al Othaim Financial Investment, Vice-Chairman and CEO of Previous positions: Chairman of the Board of CEO of Amias Holding, Investment Portfolio memberships in Al Muhaidib Group of Bank (SABB). He also served as a Member of Trading Group, Managing Partner at KPMG Middle East Paper Co. (MEPCO), Al Oula for Manager at HSBC Saudi Arabia Limited, Companies. the Board of Directors of Sukoon Real Estate Al Manar Finance and Leasing Company, and International, and Executive Director at Dallah Real Estate Development, Thabat Construction Financial & Marketing Analyst at SABIC Company and Al Aqeeq Real Estate Company. Member of the Board and Executive Committee Hospital. Qualifications: Bachelor’s degree of Science in and Amwal Khaleej Commercial Investment. America, and Financial Analyst at JP Morgan. of Nakheel Agricultural Production Company. Statistics, King Saud University, Saudi Arabia Qualifications:Bachelor’s degree of Commerce, Qualifications: Bachelor’s degree of Science in Supervisor of Real Estate Qualifications: Second Class, Faculty of Qualifications: Master’s degree of Business Finance, Sauder School of Business, University Previous positions: Management with a major in Accounting, King Experience: Managing a number of companies Financing at Kuwait Finance House, and Head
Medicine, King Saud University, Saudi Arabia Administration, Rice University, USA of British Columbia, Canada Saud University, Saudi Arabia. FINANCIAL STATEMENTS in the food and contracting fields. He also sits of Real Estate Investment at Noor Financial Experience: Business, industrial and banking Bachelor’s degree of Economics, University of on a number of other Boards. Experience: Financial management, Investment Company. Advanced Management and Leadership management, as well as investment Virginia, USA investments and financial markets. Program, Oxford University, UK management and real estate development and Qualifications: Bachelor’s degree of Accounting, Certified Financial Analyst (CFA) Kuwait University Experience: Financial, administrative and contracting. He also sits on a number of other auditing consultancy, executive management Experience: Financial and administrative fields, Boards and Committees. Member of Kuwait Association of Accountants in a health institution, executive management portfolio management, studying and analyzing and Auditors of listed companies. He also sits on a number in retail and wholesale, and sits on other of other Boards and Committees of listed and Member of Kuwait Economic Society Boards and Committees. private companies. Experience: Business management, financial auditing, risk management and real estate investment.
Mr. Abdulaziz Khaled Al Ghufaily Dr. Adnan Abdulfattah Soufi Eng. Mutaz Qusai Alazawi Mr. Abdulrahman Mohammed Ramzi Addas Mr. Rakan Abdulaziz Al Fadl
Board Member Board Member Board Member Board Member Board Member Non-Executive Non-Executive Non-Executive Independent Independent
Current positions: Retired – Public sector and Current positions: Founder and Managing Current positions: Managing Director of his Current positions: Chairman of Savola World Current positions: Founder and Director of Board Member of various of companies. Partner of DAS Partners, Board Member of Group of Companies, Vice-Chairman of Riyadh Board of Trustees and Member of Savola Group London Realty Limited, Executive Director and NCB Capital, Vice-Chairman of SISCO Group, Bank, Chairman of Qatrana Cement, and Board Remuneration and Nomination Committee, Board Member at Al Fadl Group, Board Previous positions: General Director of Local Shares Dept., Director of Hassana Investment, and Chairman of the Advisory Committee of Member of Mobily, Arabian Cement, Herfy Member of the Board, Executive Committee and Member, President and CEO of Sahara Direct Investments Dept. of General the General Authority for Awqaf. Foods, SICEP, ST&T, and Wusataa. Audit Committee of Alinma Bank, Chairman of Building Contractors, Board Member and Diyar Al Khayyal Real Estate Development, Executive Committee Member at Rabya, Board Organization for Social Insurance (GOSI). Previous positions: Member of the Board of Previous positions: Running his group of Commissioners of the Capital Market Authority companies, and Director at Merrill Lynch, KSA. Chairman and Risk Management Committee Member and Investment Committee Member Qualifications: Master’s degree of Economics, (CMA) by Royal Decree appointment, Member of Tunisian Saudi Bank, Board Member of at Al Fadl Investments, Board Member and Western Illinois University, USA Qualifications: Bachelor’s degree of Computer Chairman of the Advisory Committee of the Al Rabie Saudi Food, Board Member and Chairman Investment Committee Member at Al Fadl Real Bachelor’s degree of Economics, King Saud Engineering, King Saud University, Saudi of the Investment Committee at Environment Fund, Estate, and Board Member and Investment CMA Board, CEO of SEDCO Holding, Dean of Arabia University, Saudi Arabia the Faculty of Economics and Administration Member of Risk Committee at Saudi Ground Committee Member at Al Takamul Group. Investment, trade, financial Services, Member of the Risk and Compliance Experience: Social insurance, investment and Professor of Business Administration and Experience: Previous positions: Running his Group of portfolios and shares. He also sits on a number International Finance at King Abdulaziz markets, construction management, banking Committee of General Authority for Zakat and Tax, Companies. of other Boards and Committees. University (KAU), and Senior Associate Member and mergers and acquisitions. He also sits on a Member of the Investment and Loans Committees number of other Boards and Committees. at Agriculture Development Fund. Qualifications: Bachelor’s degree in Finance of Oxford University’s St. Antony’s College. and Economics, Babson College, USA Several senior executive Qualifications: Fulbright Scholar Previous positions: positions at National Commercial Bank, and Experience: Several managerial and leadership Ph.D. in Business Administration and Managing Director for Real Estate Group in charge positions and Board memberships in Al Fadl International Finance, George Washington of Real Estate investments and Member of the Group of Companies. He also sits on a number University, USA Executive and Strategic Committees at SEDCO. of other Boards and Committees. Executive strategist leader Experience: Qualifications: Master’s degree of Business specialized in corporate governance, as well as Administration from the University of Denver, USA business development, institutional investment with a major in Finance and leading transformation. Bachelor’s degree in Business Administration, King Abdulaziz University, Saudia Arabia with First Degree Honors Experience: Banking, risk management, strategic management and investment.
18 The Savola Group Annual Report 2020 19 OVERVIEW
Food Investments Our People, Culture and Values Group CEO’s Message Savola achieved revenue Thanks to our efforts to optimize expenses, Given the global threat posed by the of SAR 21.7 billion in 2020, we have secured an increase in profit over pandemic, we placed significant emphasis representing an increase of 2019. In 2020, the higher value-added on maintaining the health, safety and well- 1.4% over 2019. products in our portfolio allowed us to being of our employees in 2020. In Safeguarding Our achieve higher margins and profitability. We particular, we focused on awareness and STRATEGIC REVIEW have also secured more cost-effective education; by ensuring clear messages practices among our operating companies in were communicated to our people across SAR billion 2020, having established a program to the Group, we were able to both distribute People, Profitability identify and implement potential synergies preventative advice and maintain complete across the Group. transparency regarding our response to the spread of COVID-19. and the Kingdom’s 21.7 In response to the COVID-19 crisis, SFC restructured production lines, whilst also We recognize that our people are key to our
making sure our supply chain was robust success and worked throughout 2020 to DIRECTORS’ REPORT and open so factories could continue to develop and deploy a long-term incentive Food Security Strong Performance and work and meet demands. Our expense plan (LTIP) to provide additional methods of Increased Profitability rationalization program also continued to retaining key talent across Savola. The LTIP Savola achieved revenue of SAR 21.7 billion achieve results, reducing costs and will be expanded in the coming years in 2020, representing an increase of 1.4% generating efficiencies. to cover an increasing number of roles. over 2019. Our gross profit for 2020 was SAR 4.64 billion – 3% higher than in 2019 – We also worked closely with the team at In keeping with the goals of the nation while EBITDA grew by 10.8% to reach Al Kabeer, achieving solid growth and and the Saudi Vision 2030, we are SAR 2.78 billion. performance, and capitalizing on a changing committed to Nationalization, with the FINANCIAL STATEMENTS Savola has not only stood market dynamic driven by more at-home proportion of Saudi employees in Savola Savola Foods Company (SFC) generated cooking by expanding our product range. reaching 37% of our total workforce in 2020, firm in the face of this adversity, SAR 8.64 billion in revenue and achieved Almarai, too, saw notable growth and a representing a 21% increase over 2019. We 3.1 million metric tons in sales volumes but succeeded in achieving range of product launches, despite the have also enhanced our succession planning during the year. Meanwhile Panda Retail, prevailing conditions. for key positions across the organization which remains the largest modern retailer in remarkable results. during the year to ensure appropriate Saudi Arabia, delivered SAR 11.6 billion in governance and contingencies with respect revenue. to the future of our business. Group gross profit for 2020 Frozen foods player, Al Kabeer Group of was SAR 4.64 billion – 3% Companies, in which Savola holds a 51% higher than in 2019 – while Delivering Continued shareholding, posted revenue of SAR 737 EBITDA grew by 10.8% to Growth in 2021 Savola has succeeded in transforming In what has been a highly challenging The Group therefore began coordinating million. For the year, Almarai – 34.52% of reach SAR 2.78 billion. We look forward to securing the continued adversity into opportunity during this period for people and businesses all over closely with government agencies to ensure which is owned by Savola – generated growth of our core business in the coming challenging year, delivering a variety of the world as they have sought to contain the the integrity of the supply chain and the revenue of SAR 15.36 billion, and Herfy, in year, capitalizing on the foundations laid in initiatives that have served to secure our impacts of the global COVID-19 pandemic, continued movement of goods to satisfy which the Group maintains a 49% share, 2020, while also looking for potential new continued growth and performance. Led by Savola has not only stood firm in the face of demand in the face of shortages. delivered revenue of SAR 1.07 billion. venues to ensure the sustainability of our the insights of our experienced Board and this adversity but succeeded in achieving growth trajectory. astute Executive Management and remarkable results. Throughout the crisis, we have remained Securing Growth and fully aware of our responsibilities to protect 10.8% To all of our employees, I thank you for your powered by our dedicated colleagues, Development in 2020 Thanks to our resilience, both in terms the health and wellbeing of our people and steadfast dedication and contributions to Savola made strong efforts to overcome the Savola continues to be a leader in our home of our operations and the outstanding our customers across our entire operating our success during this year. Likewise, to our challenges presented by the pandemic and market of Saudi Arabia and plays a key role commitment of our people, we have met footprint. With the onset of the pandemic, Retail Investments supportive Board of Directors, experienced almost doubled its profitability for the year in many of our other markets. Given this the challenge head-on, adapting to the new we immediately moved to ensure all our Despite the turmoil experienced throughout Executive Management team and all of our compared to the previous year. We have strategic position in the food and retail reality through innovation, while maintaining premises were made safe, in coordination the year, 2020 saw the continued turnaround stakeholders, I am grateful for your resilience maintained our positive momentum from sectors of the MENA region, Forbes Middle the focus on our strategic goals. In this and cooperation with the relevant of our Panda retail business with a return to and ability to come together to transform the previous year while launching a venture East Magazine ranked Savola 14th in the way, Savola has succeeded in creating authorities. full-year profitability, which benefited a challenging year into one marked by capital program to drive further sustainable Kingdom and 39th in the region in its ‘Top growth and to augment our operating opportunities in the midst of current positively from the COVID-19 impact. opportunity and growth. Those employees who were able to fulfil 100 companies in the Middle East for 2020’. companies in 2021. challenges, capitalizing on e-commerce their roles remotely began working from Having quickly identified the changing channels to serve its customers more Our focus in 2020 remained concentrated home to reduce the risk of contracting needs of our customers and our market in I am proud to have recently joined Savola as effectively during the measures to contain on the goal of supporting and growing our or transmitting the virus, with high-risk response to the COVID-19 pandemic, we the Chief Executive Officer and I appreciate the virus. operating companies in the food and retail individuals being prioritized. We also accelerated the launch of PandaClick, our Waleed Khalid Fatani the opportunity to work alongside such an spaces. Given the demands of the Given the potential implications of the implemented state-of-the art monitoring, new e-commerce platform for grocery Group Chief Executive Officer inspiring team to achieve further outstanding COVID-19 crisis, we concentrated our efforts pandemic for the nation, Savola was highly powered by leading technologies, to purchases and deliveries from Panda. results for our shareholders in the years to on our new e-commerce platform, as well as conscious of its role as a pillar of the preserve workplace and customer safety, come. on factory modernization and our disruptive Kingdom’s food security. With the onset sharing our experiences and best 2020 was a challenging year, in particular for food and retail technology investment of the pandemic, a notable rise in volumes practices to benefit other companies Herfy, which saw lower sales compared to programs. was evident as people began stockpiling and organizations to assist in limiting 2019 as a result of the direct and indirect essential items. the spread of the virus. 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.
20 The Savola Group Annual Report 2020 21 Mr. Elnour Ali Saad Mr. Mohammad Nasr Mr. Morhaf M. Alsamman
OVERVIEW
Executive Management
Mr. Waleed Khalid Fatani Mr. Sameh M. Hassan Dr. Bander T. Hamooh STRATEGIC REVIEW Current position: Executive Director, Corporate Current position: Executive Director, Current position: Executive Director, Human Governance, Compliance, Legal Affairs, and Investment Resources and Corporate Services Board Secretary Previous positions: Various leadership Previous positions: Head of Human Resources Previous positions: Various senior positions in positions in investment strategy and and Head of Talent Acquisition for Savola Savola Group including Executive Director of transactions across MENA, Europe, and Asia in Group, and various positions in local and Corporate Governance, Compliance and Legal private equity, mergers and acquisitions and multinational companies, including Emaar Affairs, Director of Corporate Governance and consulting with leading global and regional Economic City, NCB and Cristal Global. Board Affairs for Savola and its subsidiaries companies such as Credit Suisse, Gulf Capital Qualifications: Certified Professional in Human including Food Sector and Retail Sector, and and Al Mal Capital (an investments subsidiary Resources – Internationalism (PHRi) from the Senior Manager of Corporates, Board Affairs of Dubai Investments PJSC). HR Certification Institute and Communication. Master’s degree in Business DIRECTORS’ REPORT Current position: Group CEO Current position: CEO of Savola Foods Current position: CEO of Panda Retail Qualifications: Master’s degree in Business Information Company Company Qualifications: Master’s degree in Law (LLM), Administration, London Business School, UK Technology, DePaul University, USA Previous positions: CEO of Saudi Fransi University of Cumbria, UK Bachelor’s degree in Industrial and Capital, Group Treasurer of Abdul Lateef Jamil Previous positions: Chief Portfolio Officer of Previous positions: CEO of Al Nahdi Medical Experience: Over 13 years of experience in and Capital Markets and Investment Advisor to Al Faisaliah Group, CEO of Saudi Tadawi Company, and General Supervisor of Public Bachelor’s degree and MBA, Sudan University Manufacturing Systems Engineering, Lehigh HR Management, mainly covering HR business the President, General Manager of Deutsche Healthcare, Chief Operating Officer of Basamh Affairs at the Ministry of Health. of Science and Technology, Sudan University, USA partnership, staffing and recruitment, Bank Saudi Arabia, and various roles with Trading and Industries Group, and Board Certified Corporate Governance, Board and Over 20 years of experience in organization development, performance Qualifications: Bachelor’s degree in Experience: Banque Saudi Fransi including Head of Group Member of a number of other companies. Pharmaceutical Science, King Saud University, Committees Secretary investment and operational strategy management, training and development, Treasury and a Member of several Executive leadership, deal origination, restructuring, Saudization programs, and HR policies and Qualifications: Bachelor‘s degree in Saudi Arabia Experience: Over 18 years of experience in Committees. Economics, American University, Cairo, Egypt corporate governance, compliance, corporates, M&A, managing investment portfolios and exit procedures. Experience: Over 30 years of experience in Bachelor’s degree of Science in legal, Board of Directors’ and Committees’ affairs, plans across several sectors. Qualifications: Experience: Leadership, planning and retail, pharmaceutical and food industries in Accounting, California State University, USA management of foods and industrial both private and public sectors. He also serves investor relations and shareholders’ matters, and FINANCIAL STATEMENTS corporate communication. He also has practical Experience: Over 26 years of banking, multinational companies and other diverse as a Board Member of a number of companies. financial and investment experience, and sectors. experience in CMA regulation, companies’ law, experience across a variety of business and drafting reports, and managing shareholders’ financial services sectors. meetings, preparing legal memorandums and following up cases before judicial bodies.
Internal Control, Audit, Risk, and Corporate Communications and Marketing Team:
Eng. Anees Ahmed Moumina Mr. Nouman Farrukh Muhammad Abdussalam Mr. Wajid Usman Khan Mr. Aly Assem Barakat Mr. Yasser Hassan Dahlawi Mr. Amr Hamzah Almadani
Current positions: Former CEO, Savola Group Current position: Former CFO, Savola Group Current position: Group Chief Financial Current position: Group Chief Audit Officer Current position: Executive Director, Risk Current position: Director, Corporate (until 31 December 2020), Board Member of (until 31 December 2020) Officer Management Communication and Marketing Previous positions: Senior Manager at Abu National Commercial Bank, Dr. Suliman Fakeeh Previous positions: CFO of Savola Group (until Previous positions: CFO and Head of IT of Dhabi Accountability Authority, Manager at Previous positions: Head of Regulatory Previous positions: Various marketing roles Hospital Company, Herfy Company, Knowledge 31 December 2020), CFO of Savola Foods Savola Foods Company, various other senior KPMG, and Manager at Ernst & Young (EY). Compliance, Enterprise Risk Management at including Head of Shopper Marketing in Economic City Company (KEC), Effat University Company, CFO of Attieh Group, CFO of Emaar positions in Savola Group including Executive The National Commercial Bank (NCB), and Panda Retail Company, and marketing and Savola World Foundation Board of Trustees. Qualifications: Bachelor’s degree in The Economic City, Deputy Director Finance at Director Group Finance and Treasury, Executive Commerce, University of Helwan (Major Senior Advisor at KPMG Saudi Arabia. positions in Emaar the Economic City and CEO of Savola Group (until 31 Savola Group, Senior General Manager Finance Director Corporate Finance, Finance Director Fakieh Tourism Group. Previous positions: Accounting), Egypt Qualifications: Master’s degree of Science, December 2020), CEO of SEDCO Holding Group, and IT at Savola Foods, Finance Manager at and Assistant General Manager Finance, and Licensed Certified Public Accountant, USA Engineering and Technology Management, Qualifications: Master’s degree in General Manager and Senior Credit Officer of Savola Bahrain, and Assistant Manager Cost Assurance and Business Advisory at Portland State University, USA International Business, Hull University, UK Samba Financial Group, and Proctor & Gamble, and Budget of Pakistan-based cement PricewaterhouseCoopers (PwC) in Saudi Arabia Chartered Global Management Accountant Bachelor’s degree of Science, Industrial Bachelor’s degree in Marketing, King Vice-Chairman of Savola Foods Company, Vice- manufacturer. and Pakistan. Association of International and Professional Chairman of Panda Retail Company, Vice- Engineering, King Fahad University of Abdulaziz University, Saudi Arabia Qualifications: Professional qualifications in Qualifications: Master’s degree in Commerce, Accountants Petroleum and Minerals (KFUPM), Saudi Chairman of United Sugar Company, Vice- Cost and Management Accountancy and HEC, Pakistan Experience: Over 12 years of experience in Chairman of Afia International Company, Experience: Over 25 years in the financial Arabia marketing, brand management, media, Taxation Management Professional qualifications in Chartered sector, internal and external audit, Vice-Chairman of Variety Food Company (Al Experience: Around 10 years of experience digital media, communication, public Kabeer), and Board Member of Almarai Company Associate of the Institute of Cost and Accountancy governance, risk management and in risk management, mainly covering relations and retail. (all up to 31 December 2020). Management Accountants Fellow Member of the Institute of Chartered compliance. enterprise risk management, risk reporting, Fellow of the Institute of Taxation Management Accountants of Pakistan Basel II/III, capital planning and allocation, Qualifications: Master of Science in Engineering Administration with Honors, The George Bachelor’s degree of Finance, Karachi University, Associate Member of the Institute of Chartered and risk policies procedures. Washington University, USA Pakistan Accountants of England and Wales Bachelor of Science in Civil Engineering with Experience: Over 20 years of experience in Experience: Over 20 years of experience in Honors, The George Washington University, USA financial management, financing and financial management, corporate finance, accounting with Savola Group and its strategy and digital transformation with Savola Experience: Over 35 years of experience in the private sector and the financial services industry subsidiaries. Group and its subsidiaries. with experience across a variety of business sectors, including investments, retail, manufacturing and real estate.
22 The Savola Group Annual Report 2020 23 OVERVIEW
Our Strategy and Business Model 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 STRATEGIC REVIEW A Focused Model That Aims portfolio to achieve scale and profitability. for Sustainable Growth DIRECTORS’ REPORT
OUR STRENGTHS HOW WE ADD VALUE
Strategic Focus Leadership and Governance Capital Allocation
Savola focuses its operations on long-term Savola’s focus as a strategic Savola aims to maximize return on FINANCIAL STATEMENTS consumer trend-driven lens, aiming to shareholder is to implement best investment by deploying or dynamically allocate capital to generate practices across its portfolio to redeploying capital to enhance Our Corporate Values long-term value growth. ensure: shareholder returns and create additional value by gaining access Strong Governance Framework - Alignment of incentives among to segments with long-term A robust governance and transparency stakeholders; and potential within the consumer framework, prioritized throughout Savola’s space. The primary objective is to Our values underpin everything we do, they are a blueprint for concrete - Selection of the right leaders and history, building shareholder trust. generate sustainable excess returns actions we take as individuals, as a team and as a company, every day. management teams to deliver on over the cost of capital. Infrastructure and Consumer Access strategic and operational targets. Since the Group was founded in 1979, this is how we do business: Through our holdings, we possess Saudi Arabia’s Long-Term Strategic Planning largest distribution network, retail space and Setting Targets and Monitoring Savola believes that in addition to brand portfolio in the country’s consumer space Performance managing our capital and operating Savola is building the tools required and touch millions of consumers across all of companies for performance and for effective performance our markets. long-term sustainability at the management across its portfolio. subsidiary level, our role is to look at This includes both short-term and PERSONAL VALUES GROUP VALUES CORPORATE VALUES our markets, our holdings and our long-term operational and financial operations with a view to realize our KPIs, with periodic reviews and a OUR CHALLENGES ambition of maximizing our share of proactive approach that prioritizes consumer spend across our markets Confident Humility; Having Trusting; Trusting Conscientiousness; the long-term best interest of the Tawado: Ihsan Al-Dhan: Taqwa: profitably over the long-term the confidence to perform our others intentions without doubting it Fulfillment of our responsibility business. • Challenging macro-environment in horizon. responsibilities while having the toward external parties operating countries, whereas a number of humility to minimize our ego Mu’azarah: Caring; Provide support countries introduced economic reforms that to our colleagues to help enable Amanah: Honesty; Is the fulfillment may have a negative impact on the It’qan: Relentless pursuit of their success of our responsibilities towards purchasing power of consumers perfection; The ability, willingness, investors desire and intention to do our best Qabool: Acceptance; Endure the • Change in consumer behaviour, where to ensure that work is completed to views of others by going beyond Mujahadah: Personal control; consumer preferences and tastes may the best standards tolerance or acceptance Achieving the personal discipline change in a more pronounced manner that necessary to fulfill our may impact current products and business Azm: Fierce Resolve; Apply what we Iq’bal: Approaching; Improve what responsibilities models learn to improve ourselves we do by using what we have learned from the interaction with Birr: Caring Justice; Fulfillments • Limited number of transactable assets from Iq’tida: Apprenticeship; To seek others to our responsibility toward our the perspective of an investment holding out, interact with, and learn from colleagues and the employees of whose key directive is to allocate capital those who are more knowledgeable the Company than us • 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
24 The Savola Group Annual Report 2020 25 OVERVIEW
Our Journey
Four Decades of Growth STRATEGIC REVIEW and Diversification DIRECTORS’ REPORT 1970s 1990s 2000s 2010s 2010s 2020 FINANCIAL STATEMENTS
1979 1991 2003 2010 2015 2017 2018 2020 Savola is established, with a Acquisition of a 40% shareholding Savola Foods establishes edible Savola launches its first CSR Savola Foods enters the seafood Savola sells a 2% stake in Savola acquires a majority stake Savola named among Top 20 paid-up capital of SAR 40 million in Almarai. oil businesses in Morocco and program, ‘Makeen’, to train and business with global seafood Almarai, as a part of its capital (51%) in Al Kabeer, one of the Great Places To Work® in the and 50 employees. Sudan. empower people with leader, Thai Union, to launch the re-allocation, whilst remaining region’s leading frozen foods Kingdom of Saudi Arabia. disabilities. famous John West brand in 12 the largest shareholder with companies. markets across the MENA region. a 34.52% stake. 2004
Panda launches the Hyper Savola ranks top 10 for Panda format. transparency in corporate governance, environment and Herfy is listed on the Saudi Stock 1992 social practices in MENA by S&P Exchange (Tadawul) with Savola and Dow Jones indices and Savola becomes a publicly listed retaining 49% of its shares. Hawkamah. company on the Saudi Stock Savola Foods launches Afia 2019 1980s Savola ranked top 10 among all Exchange (Tadawul). Distribution Company in Savola issues the 2nd tranche Savola launches its second CSR non-financial sector companies 2011 Saudi Arabia. of Sukuk, pursuant to a new program, ‘Negaderha’. traded on Tadawul in the Savola Bahrain and Savola Egypt Standard & Poor’s, Hawkamah program in an aggregate Corporate Governance Index commence edible oil operations. and the International Finance amount of SAR 1 billion. nd (CGI) by Al Faisal University’s Corporation rank Savola 2 Negaderha Corporate Governance Center. 1981 1993 2005 among top-listed companies in Savola among the 31 companies the Arab world for governance added to MSCI (Morgan Stanley Savola’s edible oil refinery in Joint venture with Tate & Lyle to Savola establishes Kinan Real Savola was among the ‘Top 100 and transparency. Savola Foods commissions a new Capital International), as part Jeddah, the first in Saudi establish United Sugar Company, Estate, subsequently divesting companies in the Middle East’ for 70% through private placement. factory in Jeddah to manufacture Tadawul’s inclusion into the Arabia, begins operations. Saudi Arabia’s first sugar refinery. Savola Foods enters the pasta 2020 according to Forbes Middle specialty fats for the B2B market. MSCI Emerging Markets Index. th market by acquiring El Maleka East, ranked 14 in the Kingdom of Saudi Arabia and 39th in the 1982 1995 2006 Company and El Farasha Savola Foods establishes a joint Standard & Poor’s, Hawkamah 2016 Middle East. Launch of Afia premium corn Afia International Egypt is Savola invests in King Abdullah Company in Egypt. venture in Iraq with Aves to and the International Finance oil. By the late 1980s, Savola formed through the merger of Economic City (KAEC) and Savola unveils a new brand create Bonus Food Company Corporation rank Savola th captures 70% of the Saudi Savola Egypt and SIME Derby Knowledge Economic City as a identity, symbolizing its evolution LLC, which is engaged in the 4 among top-listed companies edible oil market. Egypt. founding shareholder. to a strategic investment holding refining and packaging of edible in the Arab world for company. oils and vegetable ghee. governance and transparency. Savola Foods establishes an edible oil factory in Egypt. 2008 Panda acquires Giant Stores and 1998 opens its first central distribution 2013 center in Riyadh. Savola enters the retail sector, Savola’s first Sukuk issuance following its merger with Azizia (SAR 1.5 billion). Savola receives the Sa’afa Award Panda. 2009 from the Integrity and Savola acquires Al Muhaidib’s Panda acquires Géant Stores Transparency Foundation. Savola gains a 70% stake in operations and expands its shares in Panda (18.6%) and Herfy through the Panda merger. network to 152 locations. Savola Foods (10%) in exchange for the issue of 33.9 million new Savola shares through a capital increase to SAR 5.34 billion.
26 The Savola Group Annual Report 2020 27 OVERVIEW
Food STRATEGIC REVIEW Investments DIRECTORS’ REPORT Our portfolio of food brands are industry champions and market leaders in the key economies they operate in. FINANCIAL STATEMENTS
Revenue Breakdown (SAR million)
5,709 2,329 537 737 15,357 69 Edible Oil and Fats Sugar Pasta Frozen Foods Almarai Others
Savola Foods Company 2020 Sales Volume by delivered a robust financial Business Line (in million MT) performance in 2020 with SAR 311 million in profits on SAR 8,644 million in net revenue. 1.5 1.3
SAR million 0.3 311 Edible Oil Sugar Pasta
28 The Savola Group Annual Report 2020 29 OVERVIEW
A Resilient Response As one of our most valuable assets, we also As with companies and industries Food Investments As a regional food industry champion, sought to shield our employees from harm throughout the Saudi economy and around producing staple foods for homes by implementing rigorous safety standards the world, the pandemic imposed a throughout the Kingdom and beyond, our to allow them to continue operating, safe in number of negative effects on our business. immediate priority in facing the COVID-19 the knowledge that their health and The success of our business-to-business wellbeing were key priorities. (B2B) channel in 2020, for example, was crisis was to ensure food security and STRATEGIC REVIEW availability across our markets, while also undermined by a combination of factors, Despite the economic effects of the global Savola Foods assuring consumers of our high standards including the national lockdown and health crisis, we remained committed to of quality and safety. We acted with movement restrictions, which also impacted our role as a key national employer and purpose and speed to coordinate with all the hotel, restaurant and café (HORECA) engine of industrial development, key stakeholders – from government and industry. Furthermore, the limited travel Company supporting the national economy in facing and religious tourism in the Kingdom also strategic partners to our people, customers the global shock initiated by the virus and and community – to build a shared undermined activity across these industries. delivering progress toward achieving the understanding throughout this challenging
strategic objectives of Saudi Vision 2030. Conversely, however, our business-to- DIRECTORS’ REPORT period. consumer (B2C) channel witnessed healthy By actively restructuring our production At end-2020, Savola Foods employed growth during the course of the pandemic, lines and providing additional support for 6,549 people across its operations, of and particularly in the first half of the year, imports and exports, whilst also making Throughout 2020, Savola Foods Company (SFC) has remained steadfast and resilient in the face of the which 1,300 were based in Saudi Arabia, owing to food stockpiling, and the sizeable sure our supply chain was robust and fully disruption caused by the pandemic. As a market leader in various segments in key economies throughout in addition to 4,186 indirect employees. increase of in-home dining preference due operational, we strengthened our resilience the MENA region, we solidified our role as a pillar of sustainability and endurance, ensuring a stable, reliable to health and movement restrictions. and capacity to meet the significant supply of essential items and products across our geographic footprint. demand. FINANCIAL STATEMENTS
Savola Foods Company is a leading producer of staple products, including edible oils, vegetable ghee, sugar, pasta, CAPEX (SAR million) Revenue (SAR billion) 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 194 8.64 the region and beyond, earning their place as trusted products in households and supermarket shelves across the MENA region. Outlets Reached Consumers Served (million)
Overall, SFC successfully turned the challenges of 2020 into opportunities, achieving a robust financial performance. The business generated SAR 8.64 billion 741,000 280 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.
30 The Savola Group Annual Report 2020 31 OVERVIEW
Food Investments Market Share in SFC Markets for Major Product Categories Total Market Value Total SFC Market in SFC Markets Value in SFC Markets SFC Value Share in Category (SAR million) (SAR million) SFC Markets
Edible Oil 9,512 1,979 20.8% STRATEGIC REVIEW
Savola Foods 677 247 36.5% Ghee Company Pasta 648 261 40.3% Sugar 451 337 74.7%
Sources: 1. Nielsen Retail Audit 2. Strategic Marketing Services of Savola Foods estimates and secondary sales data DIRECTORS’ REPORT
Delivering Healthy Performance We re-launched our Ganna brand of ghee Pasta In 2020, we interviewed more than 50,000 in Egypt in 2020, introducing an upgraded The Savola Foods pasta business is largely consumers to learn their preferences, desires Throughout 2020, SFC continued to Sales flavor, accompanied by a digital and focused on Egypt, where we are the and requirements, as well as to gain insights manufacture and distribute our brands to above-the-line marketing campaign for biggest producer of pasta by market share, and uncover trends in the rapidly changing consumers across Saudi Arabia and around Value: SAR 8.64 billion the brand and for our premium Rawaby accounting for more than 40% of the marketplace. The knowledge and the world, defending our market share and Sugar SAR 2.32 billion vegetable ghee. branded packaged market in 2020. The understanding gained through this process focusing on creating value for our business FINANCIAL STATEMENTS Company’s flagship El Maleka brand leads ultimately supports our innovation pipeline and stakeholders. Oil SAR 5.71 billion Sugar the packed pasta market in Egypt, across 4 key areas: health and wellness; new Pasta SAR 0.54 billion An undisputed leader in Saudi Arabia’s Edible oils contributing to SFC’s SAR 537 million in taste preferences; convenience; and value sugar industry, SFC accounts for over 70% A major product line for SFC, our edible oils annual sales. for money solutions. This led to the launch of of our home market, in addition to being business continued to thrive in 2020, Volume: Total: 3.1 KMT more than 10 innovative B2C products during the leading supplier in Jordan, with 40% of To reinforce this leading position, Savola continuing our strong market position in the year – covering oils, ghee, pasta and the sugar market. Foods has been concentrating on product- Saudi Arabia, Jordan, Sudan, Egypt, bakery – and laid the foundation for further based marketing since 2019; this has had Lebanon, Algeria and Morocco. product innovation in the coming year. 49% Edible Oil (1.5 KMT) In 2020, United Sugar Company achieved exceptional results, as seen in the excellent SAR 2.3 billion in sales from 1.3 million Savola achieved a full-year value of SAR 5.7 Sugar (1.3 KMT) sales growth for our Italiano pasta brand. 42% metric tons of refined sugar, including 2021 Outlook billion in edible oil sales in 2020, from 1.5 Savola Foods achieved sales volume of 9% Pasta (0.3 KMT) United Sugar Egypt Company which is Savola Foods maintains a rich and diverse million tons of production, of which 30,000 284,000 metric tons of pasta in 2020, with equity accounted, of which 795,000 metric innovation pipeline, with multiple launches tons were exported, accounting for SAR 158 exports accounting for 48,000 metric tons tons were exported, accounting for SAR of new initiatives across all product million. We account for 57.4% of the edible and over SAR 80 million. 1.22 billion. categories planned for 2021, providing oils market in Saudi Arabia and 14.7% of the Exports The Company also re-launched El Maleka functional differentiation that will set SFC GCC market. Beyond the Gulf, Savola has an Our Al Osra brand is the leading sugar pasta brand in Egypt, using an improved apart within the region’s food industries. edible oils market share of 9% in Lebanon, Value: SAR 1.46 billion brand in the Kingdom, with the highest product formula, a new distinctive 31% in Egypt, 26% in Sudan. awareness and usage KPIs, which is a direct In the coming year, we will devote increasing Sugar SAR 1,226 million packaging design, and a comprehensive result of our dominant market presence and focus to B2B growth as and when markets 2020 saw the highly successful relaunch of marketing campaign. Oil SAR 158 million continuous brand-building activities. recover from the effects of the pandemic. Afia in Saudi Arabia, with a new bottle SAR 80 million We will also seek to maximize the design and size, supported by a 360-degree Pasta Our specialty range of brown sugar An Innovative Response to opportunities provided by the recent launch marketing campaign. continued to perform well during the year, Market Disruption Volume: Total: 873 KMT of peanut butter spread in Sudan, DAKWA. supported by in-mall activations, marketing SFC responded to the crisis with agility and We also launched Afia coconut oil in KSA, 795 KMT campaigns, and engaging content and adaptation, amending our plans to mitigate As we look to capitalize on this recovery, in response to global health trends and the Sugar recipes to increase in-home penetration the business implications of COVID-19. This we will continue to turn challenges into evolving preference of consumers; Oil 30 KMT and consumption. included the design and roll out of opportunities, guided by our comprehensive expanded our olive oil range with the Pasta 48 KMT structural changes in our organization and ‘4 by 4’ plan for 2020–2024, which sets out a introduction of Zaytouni to the Saudi market We also expanded our convenience range operating systems, such as a new marketing strategic path for growth and value creation to compete in the Value-For-Money (VFM) to offer not only on-the-go solutions (i.e. structure, functional delegation of through its 4 pillars: tier; and broadened our offering still further Factories sachets and cubes) but also our first ever authorities, roles and responsibilities, the with the introduction of 4 flavor-infused Afia icing sugar shaker, as a convenient baking new stage innovation gate process, and the • Growing today’s existing business through olive oils. 14 fully fledged manufacturing facilities solution at home, while also supporting our roll out of SFC’s objectives, goals, strategies line extensions KSA Edible oil, Sugar, Vegetable fats range through enhanced in-store visibility and measures covering all functions. • Investing in new trending categories and marketing activities. Egypt Edible oil factory, Sugar and Pasta • Penetrating new categories in the region SFC has one of the largest Consumer Edible oil factory Morocco Understanding and R&D Centers in the • Capitalizing on increasing food service Algeria Edible oil factory region. The capabilities and expertise within online spend to accommodate new trends this center ensure that we are always and needs Sudan Edible oil factory listening to our customers, understanding Other countries Three edible oil factories and one bakery their evolving needs, and developing our 2019 products and initiatives to satisfy and delight them.
32 The Savola Group Annual Report 2020 33 OVERVIEW
Food Investments STRATEGIC REVIEW Almarai DIRECTORS’ REPORT
Savola is the largest shareholder in Almarai, the world’s About Almarai Financial and Strategic Almarai preserved its leading market share largest vertically-integrated dairy and a leading food producer Almarai preserved Established in 1977 and one of Saudi Highlights in 2020 across multiple segments, including dairy, and distributor in the Middle East. With a 34.52% holding in Arabia’s leading brands, Almarai is trusted In 2020, Almarai continued to deliver its juice and poultry. Compared to 2019, the company, Almarai represents a key strategic investment its leading market for its quality throughout the Kingdom, the highly popular products throughout the revenues for food rose by 15%, long-life for Savola. GCC and beyond. As a key pillar of the Middle East, despite the significant dairy by 18%, poultry by 8%, fresh dairy by MENA food market and a leader in major uncertainty and operational complexity 2% and fruit juice by 3%. Overall revenue share across food categories such as dairy, bakery, poultry generated by the COVID-19 pandemic, for 2020 grew by 7% over 2019, while net and juice for Saudi Arabian consumers, driven by its commitment to provide income rose by 10% for the year. FINANCIAL STATEMENTS multiple segments, Almarai represents a highly strategic ‘quality that you can trust’. Almarai’s brand equity continued to build investment for Savola. Solidifying this during the year, having been named Most prominent market position, Almarai remains By putting the safety of its customers and including dairy, Chosen Fast-Moving Consumer Goods at the forefront of innovation in the sector, employees first, whilst also prioritizing the (FMCG) Brand by Kantar, KSA Brand with introducing multiple new product offerings health and wellbeing of the communities juice and poultry. the Most Loyal Customers by the YouGov each year that cater to the evolving needs it serves, Almarai was able to continue Customer Loyalty Rankings, and among the of the local population in Saudi Arabia. delivering essential products to nations across the region in a reliable and Kingdom’s most influential brands by IPSOS. responsible way throughout 2020. Furthermore, the company maintained its commitments to shareholders by rewarding investors with a recommended increase in annual dividend.
15.36 Revenue Net Income Savola Shareholding Earnings Per Share (SAR billion) (SAR million) (SAR)
1,984 2.02 1,812 1.83
34.52%
2019 2020 2019 2020
34 The Savola Group Annual Report 2020 35 OVERVIEW
Food Investments
Al Kabeer Group STRATEGIC REVIEW of Companies DIRECTORS’ REPORT
As one of the GCC’s leading frozen food suppliers, About Al Kabeer Group However, our consumer business was To preserve the health and wellbeing of its Al Kabeer is a household name in the region, having served the Al Kabeer plays a of Companies positively impacted as customers chose to employees and customers during 2020, people of the GCC since 1974. With a 51% stake in the business, Today, Al Kabeer manufactures and consume frozen foods at home in preference Al Kabeer implemented stricter safety and Savola retains a key strategic foothold in the GCC’s substantial prominent role in distributes a portfolio of more than 200 to dining out. hygiene standards in all of its facilities and and growing frozen foods market. products for markets across the region, throughout its distribution network, whilst As consumer demand per capita for frozen including frozen poultry, beef, seafood, successfully navigating increasingly complex delivering Savola’s foods grew dramatically during the pandemic, snacks and ready-to-eat meals. The brand supply chain logistics owing to movement
Al Kabeer quickly and efficiently rose to meet FINANCIAL STATEMENTS maintains 3 key manufacturing facilities, restrictions, maintaining our position as a strategy, providing this supply challenge, ensuring sufficient located in the UAE and Saudi Arabia, dependable supplier for retail clients and production across its footprint. The growing producing products for distribution via a local consumers alike. preference for frozen food has also served to robust growth network of 9 cold storage facilities and gain greater exposure for our products in new As a key element in Savola Group’s vision 11,000 outlets in the GCC. prospects and consumer segments – creating opportunities to increase the contribution of value-added that will remain going forward. categories to its food portfolio, Al Kabeer catering to a Financial and Strategic plays a prominent role in delivering Savola’s Highlights in 2020 Al Kabeer therefore performed well in strategy, providing robust growth prospects dynamic population. True to its well-established reputation, Al 2020, despite the challenging environment. and catering to a dynamic population. Kabeer has played a key role in supporting Top-line sales increased by over 18.87% Al Kabeer also supports the ongoing efforts the region’s food security during the course compared to 2019, driven by strong growth, to promote the growth of the local of the COVID-19 pandemic by providing a while Al Kabeer’s market share in the manufacturing sector in the Kingdom. In dependable supply of high-quality products relevant categories increased by 3% on a addition, it reinforces the trend to strengthen to communities throughout the GCC. value basis. Profitability grew by more than the cold distribution chain and ensure food 59%, with net margins improving from 11% security, particularly through ramping up Al Kabeer’s business-to-business (B2B) sales in 2019 to 13% in 2020, as a result of the its processing facility in King Abdullah were undermined by the national lockdowns increased diversification of the product mix, Economic City. In the coming years, across the region and the hiatus in religious improved material pricing, and the operating Al Kabeer plans to carry out additional tourism in the Kingdom, placing increased leverage. complementary expansions for its pressures on restaurants and catering manufacturing lines and cold storage companies. facilities in the Kingdom. 737 Revenue Net Profit Savola Shareholding (SAR million) (SAR million)
107
67
51%
2019 2020
36 The Savola Group Annual Report 2020 37 OVERVIEW
Retail STRATEGIC REVIEW Investments DIRECTORS’ REPORT
Total Number Our resilient retail of Panda Stores portfolio delivered an 205 205 encouraging performance in 2020, establishing strong FINANCIAL STATEMENTS foundations for future growth.
2019 2020
Panda Selling Area (m2)
634,399 628,189
13% 2019 2020
Panda expanded to 13% of Total Number the total grocery market in of Herfy Branches Saudi Arabia, and 28.6% of the hypermarket/supermarket 394 400 segment in 2020.
2019 2020
38 The Savola Group Annual Report 2020 39 OVERVIEW
Retail Investments STRATEGIC REVIEW Panda Retail DIRECTORS’ REPORT
As one of the Middle East’s largest grocery retailers, Panda In the face of market disruption in 2020, Navigating the Highly Challenging Panda Growing Online Presence Retail is a household name in the region, with a presence in Panda expedited Panda Retail remained the leader of the Market Conditions Capitalizing on the shift towards more than 41 cities through 201 stores across Saudi Arabia, grocery retail market in Saudi Arabia, This year has been characterized by e-commerce in 2020 because of the as well as 4 locations in Egypt. Panda maintained its market- its efforts in the ensuring a reliable supply of quality economic pressure on a range of customer lockdowns and movement restrictions leading position in 2020, supplying essential goods to its products for households and communities segments in the Kingdom. throughout the Kingdom, Panda expedited customers and contributing to the Kingdom’s food security across the entire Kingdom throughout this its efforts in the online channel with the throughout the COVID-19 crisis. online channel with unprecedented year. The COVID-19 pandemic has affected introduction of PandaClick. consumer spending negatively and FINANCIAL STATEMENTS the introduction of Despite a challenging macroeconomic increased cost of living pressure, which in PandaClick immediately established a environment, Panda has achieved positive turn impacted the purchasing power of strong position in the online grocery PandaClick. results in 2020. While its footprint remained individuals in the Kingdom. The increase in shopping market – having been largely unchanged, with 201 stores in 41 value-added tax (VAT) in July 2020 also downloaded by hundreds of thousands of cities across the Kingdom and 4 locations in contributed to a change in the spending customers – and signaled the first step in Egypt, Panda has cemented its market habits of families throughout Saudi Arabia. the rollout of the new omnichannel strategy leadership to capture 13% of the entire for Panda. grocery retail market in Saudi Arabia, as The expected contraction in the expatriate well as 28.6% of the Modern Trade (i.e. population, owing to the effects of Panda’s social media presence has also Hypermarket and Supermarket Channels). COVID-19 on the economy, has also quickly developed and expanded undermined Panda’s customer base in throughout the year, and it now enjoys a 2020; a total of around one million growing pool of followers across major expatriates are expected to have left the social media platforms. This has allowed country in 2020. Panda to precisely target its offers to specific clusters of relevant customers, leading the industry with its tailored communications methodology.
11.6 Revenue Market share of Market Share of Total Customer Count (million) (SAR billion) Modern Trade Grocery Retail
28.6% 13% +106 +100 25% 11%
2019 2020 2019 2020 2019 2020
40 The Savola Group Annual Report 2020 41 OVERVIEW
Retail Investments STRATEGIC REVIEW Panda Retail DIRECTORS’ REPORT
Panda’s Strategic Response This included meeting the unique Complementing this new fresh concept Completing our Turnaround in 2021 Panda revealed Panda ensured complete compliance with requirements of Ramadan and positioning design, Panda also improved the share of Under the leadership of Panda’s executive the precautionary safety measures issued by Panda as a reliable partner of choice for direct sourcing for its fresh products, team, Panda aims to complete the full its new store the Ministry of Health, as well as with customers unable to perform Umrah in working directly with growers, producers, turnaround in 2021. international guidelines and universal 2020 by providing more than 11 million and manufacturers to improve quality and design concept in standards adopted to stem the spread of bottles of Zamzam water to its customers. create additional value for its customers. Specifically, Panda aims to secure a the virus. This approach is now enabling Panda to significant net improvement in its in-store
differentiate its offering and introduce FINANCIAL STATEMENTS A Fresh Approach customer experience by introducing an November 2020 Whilst implementing multiple temperature competitive pricing. increasingly differentiated offering, backed Panda revealed its new store design checks for customers and employees across by excellent customer service at all concept in November 2020 with the with the opening its operations and stores, Panda also initiated touchpoints. opening of the first of its new-look outlets. A Resurgent, Customer-Centric regular deep sanitization programs to ensure Created with a strong focus on fresh food, Brand of the first of its the safety of its outlets and optimized its To complement the in-store experience, the new concept is repositioning Panda as Panda’s turnaround – initiated at the end of store capacities to enable social distancing. Panda aspires to strengthen its new-look outlets. the store of choice when it comes to fresh 2017 – continues to deliver encouraging omnichannel positioning further enabling Moreover, Panda moved quickly to provide categories, with a view to also creating a results. it to be the grocery retailer of choice for pre-packed Panda boxes containing halo effect for the other categories. its customers across all channels. The turnaround strategy has focused on essential items to the customers not willing By introducing modern display fixtures to establishing the foundations from which to to visit stores during the COVID-19 crisis. Panda also intends to achieve a shift in its remodeled fresh department, Panda deliver a differentiated customer-centric management culture towards a more agile At the height of the COVID-19 crisis in 2020, aims to create a harmonious shopping model. To this end, Panda has worked and performance-driven organization. Panda was able to deliver on its experience for its customers, complete with diligently to harmonize its product offering commitments to customers by serving visually appealing displays and state-of-the- with its customers’ needs and demands. Transformation Program communities across the Kingdom through its art lighting solutions. The new design At the same time, Panda has also national network of stores. Its extensive features a fresh food area that has been Through its business transformation succeeded in improving fill rates and on- supply chain showed exceptional resilience, increased to capture higher share of the strategy, Panda intends to emerge not only the-shelf availability levels, and has allowing for the timely delivery of products to total sales area, with specialist sections, and as a leading player in the Kingdom’s achieved the no. 1 rank among all retailers its stores throughout 2020. around 1,500 new Stock Keeping Units grocery retail market, but also a leader in (SKUs). Since its introduction, fresh sales in the Kingdom in terms of its partnerships shaping the future of the industry. have shown healthy growth in the pilot with suppliers according to an in-depth store, driven by both customer count and survey conducted by Advantage Analytics 145 60 basket size. INISIGHTS. Supermarkets Hypermarkets
42 The Savola Group Annual Report 2020 43 OVERVIEW
Retail Investments
Herfy Food STRATEGIC REVIEW Services Company DIRECTORS’ REPORT
With a 49% stake in Herfy, one of Saudi Arabia’s About Herfy Financial and Strategic Despite the closure of many stores as a most popular fast food brands, Savola is the largest Since Savola’s initial Herfy Food Services Company, established Highlights in 2020 result of the national curfews, and the shareholder in a key player of the nation’s Quick Service in 1981, is Saudi Arabia’s leading fast food Since Savola’s initial investment in the limited operations thereafter owing to Restaurant space. investment in the chain, with 388 branches serving company in 1998, Herfy has served as the social distancing guidelines, Herfy communities across the Kingdom and an Group’s platform in the growing Quick succeeded in distributing dividends to company in 1998, international franchise with a presence of Service Restaurant (QSR) space. Faced with shareholders and expanded the digital 12 branches in Kuwait and Bangladesh. the immense disruption to the restaurant presence of the brand. Herfy has served as segment caused by the COVID-19 FINANCIAL STATEMENTS Herfy also operates a network of pastry pandemic and the resultant lockdowns shops and bakeries under the trademark introduced to curb the spread of the virus, the Group’s platform “Doka”, and is recognized as being among Herfy’s story in 2020 was one of steadfast the country’s first, fully-integrated food resilience. in the growing Quick services companies, operating its own bakery, cake, rusk and meat processing Service Restaurant facilities. (QSR) space.
1.07 Revenue Net Profit Savola Shareholding Earnings Per Share (SAR billion) (SAR million) (SAR)
196 3.03
53 0.82
49%
2019 2020 2019 2020
44 The Savola Group Annual Report 2020 45 Our People
We remain dedicated to delivering on our value proposition, which offers a healthy and positive working environment for all of our employees.
46 The Savola Group Annual Report 2020 47 OVERVIEW
Across Savola, more than 3,000 Our People new Saudi Nationals were hired Organizational during 2020. Culture STRATEGIC REVIEW 3,000+ RIGHTEOUSNESS The Engine We undertake the responsibility of maintaining the trust put in us of Our Success Responding to COVID-19 Savola’s COVID-19 response placed our people at the heart of all our actions. We
immediately moved to protect our DIRECTORS’ REPORT employees by designing and implementing RELEASED a precautionary plan built on information FULFILLMENT NOURISHMENT INTEGRITY provided by the Ministry of Health and We show We function through Putting the right other reliable health authorities. This plan responsible actions an organizational culture resources into Savola is committed to attracting and nurturing exceptional emphasized the urgency of a transition to to those who of integrity, righteousness, the right talent across our family of more than 24,000 employees, remote-working and a broad information trust us fulfillment and investments campaign to increase employee awareness persistence. including more than 18,000 based in Saudi Arabia. concerning COVID-19. FINANCIAL STATEMENTS In confronting the pandemic, Savola immediately formed a Crisis Committee We have succeeded in turning challenges We value our people above all else. We therefore remain dedicated to to oversee its response and ensure full into opportunities in 2020, despite the Faced with the threat posed by the delivering on our value proposition, compliance at all our offices, sites and PERSISTENCE significant disruption experienced across the COVID-19 pandemic, Savola which offers a healthy and positive stores, in line with the guidelines released Our realization, evaluation nation and the world, by protecting our immediately moved to prioritize the working environment for all of our by the Kingdom’s authorities. The main objective of the Crisis Committee was to and improvement of our people while pushing forward with the health and wellbeing of our employees employees, backed by a broad range own potentials delivery of our resilient Group HR strategy, across our operations, whilst of personal benefits and a series of take immediate action to achieve quick including an extensive program of training, maintaining our alignment with, and programs that ensures personal welfare wins and develop new policies and professional development and advancement commitment to, our dynamic HR and professional development. procedures to counteract the adverse opportunities. By working together, we have strategy throughout 2020. effects of the pandemic, while maintaining achieved a great leap forward in terms of maximum flexibility and adaptability. Vision our ambition to become the undisputed Isolation rooms were established within employer of choice in the food and retail employee residential compounds and industries in the MENA region. To be the employer information campaigns were launched throughout the crisis to raise employee of choice in the food awareness regarding the virus and how best to protect themselves and their families. and retail industry All frontline employees were immediately issued with personal protective equipment in the region Female Employees in our and materials to reduce the threat of Total Employees offices in Saudi Arabia infection. These included masks, gloves Mission and hand sanitizers, as well as special plexiglass barriers at checkout areas. All of • Attract and sustain best available talent these frontline workers received a special to meet current and future demands 24,331 1,285 allowance in view of their exceptional • Adhere to nationalization and enhance HQ: | SFC: | Panda: HQ: | SFC: | Panda: 54 6,450 17,827 9 37 1,239 efforts during the worst period of the employment brand pandemic. Meanwhile, those employees who were able to work remotely continued • Promote an engaged environment to to fulfill their roles from home during this support change and increase productivity period. Saudi Employees People with Disabilities • Leverage technology, social media and As our employees returned to office systems to raise the level of HR services working conditions, we took every standards precaution to ensure their health and • Develop highly skilled workforce that will safety. Signs were used to provide 6,893 301 learn, lead and respond to challenges HQ: 36 | SFC: 562 | Panda: 6,295 HQ: 1 | SFC: 10 | Panda: 290 reminders of active precautionary measures and policies, temperature checks were • Balance resourcing and cost established and special hygiene kits management distributed to all employees, containing facemasks, sanitization items and gloves.
48 The Savola Group Annual Report 2020 49 OVERVIEW
Learning, Development and Our People Savola’s employee engagement and Succession Planning Safeguarding Savola’s People and recognition activities in 2020 sought Succession planning continued to be a key focal point for Savola, ensuring that Practices in 2021 and Beyond to maintain the high standards of our proper plans and contingencies
are in place for key positions across the Building on our HR strategy to become the region’s employer of choice in the STRATEGIC REVIEW working environment and our reputation organization. Savola identified functional food and retail industry, in 2021, Savola will continue to focus on 4 key strategic as an employer of choice. development gaps for all key roles pillars that have been designed to provide our people with a uniquely rewarding through several assessment platforms and culture and working experience. channels. will We always look to promote and empower Aside from keeping our employees safe In 2021, Savola Foods Company launch a highly innovative top talent the talent across Savola. During 2020, we amid the ongoing COVID-19 pandemic, recruitment and retention strategy to were able to internally source 2 as part of our Wellness Program, which
Throughout this challenging period, all guide our activity in this area going DIRECTORS’ REPORT Engaging our Employees Tawwon and Home Loans employees from our operating companies promotes better physical and mental our employees were kept updated with forward. We believe that our exceptional people form the Savola continued providing its employees during the year, including our new CFO. health outcomes, we plan to engage regular internal awareness bedrock of our ongoing success as a company with a range of unique benefits, such as an We also introduced new guidelines and with various initiatives such as World No communications via live sessions, emails SFC will also continue to develop and and are crucial to the long-term sustainable employee home loan scheme for Saudi processes to implement effective Tobacco Day, World Health Day, Breast and posters, while precautionary measures enhance the leadership skills of staff from growth of Savola. Our aim is nothing short of employees, Takaful insurance to support planning at the various levels within the Cancer Awareness and World Diabetes including sanitization and physical management down, reflecting the latest being recognized as the undisputed employer families in the case of death or disability, Group to ensure smooth and efficient Day in 2021. distancing were rapidly implemented global trends and educational of choice in the food and retail industry within and (Tawoon) fund to assist junior staff in knowledge retention processes. We will also pursue further Employee approaches, whilst also developing across the organization. the region. Guided by our Employee Value dealing with financial emergencies. The Engagement based on respect, trust, our internal culture and working Proposition methodology and our core values, Group also obtained discounted corporate Despite the various challenges we In view of the restrictions imposed as a integrity and open communication environment with the goal of becoming this aim drives the delivery of our employee employee rates with leading brands and faced in executing our learning and FINANCIAL STATEMENTS consequence of the pandemic, Savola with our people to motivate them to a ‘regional benchmark’ in our industry. engagement and investment in human capital. corporates, including those in sectors such development plans for the year, we represented by Panda Retail, also contribute to our collective success as healthcare, retail, cafes, restaurants, succeeded in delivering more than 60% conducted its first ever Virtual Career Fair and mutual wellbeing. Panda’s major goal for 2021 is to build Savola’s employee engagement and hotels, and many others through the of our planned training in 2020, in 2020 in collaboration with the Ministry upon the sense of enthusiasm, recognition activities in 2020 sought to introduction of a branded mobile prioritized according to the importance of Human Resources and Social Our Work–life Balance objectives ownership and accountability among our maintain the high standards of our working application. of the course and the ease of transferring Development and the Human Resources remain central to our employee value people regarding the successful delivery environment and our reputation as an the training to an online platform. For Development Fund (HRDF), leveraging proposition, and we will continue to of the Company’s overarching strategy. employer of choice. example, one element in our 2020 Savola’s rapid technological advancement Nationalization adopt family-friendly policies such as learning and development plan that Throughout 2021, Panda will continue to to provide an alternative channel for As an extension to our Tawer Employee Savola remains wholeheartedly committed flexible and remote working options, as was prioritized was a collaboration with further entrench in its employees a potential candidates to apply for Engagement Program, we participated for the to nationalization and the objectives of well as events such as Kids Day, World INSEAD to develop high-potential future culture of excellence that spans every employment opportunities in restricted first time in the Great Place To Work award, Saudi Vision 2030 for greater inclusion of Book Day and the International Day of managers by enrolling them in the aspect of our business, complemented circumstances. achieving a rank among the Top 20 companies Saudi nationals across all of the Kingdom’s Friendship. Developing Emerging Leaders Program. by improvements across the Company’s in the Kingdom’s private sector. The rank was economic activities. We maintained our Our resilience in facing the pandemic Finally, Savola will deliver further performance management system. In based on a 2019 Culture Audit and Platinum Zone Nitaqat rating at our HQ in Having successfully navigated the was partly a consequence of the strong initiatives as part of our Culture doing so, the Company also aims to Engagement Survey conducted by the 2020, as did Savola Foods Company, while complexities of the emergency response corporate values we espouse as a Group – Improvement Program to accentuate enhance Panda’s ability to attract, grow Institute, which revealed a 78% level of Panda continues to make significant to the COVID-19 pandemic, including Righteousness ( ), Integrity ( ), the shared values, attitudes, standards and retain people of exceptional talent ,engagement. Great Place to Work® is a global improvements, achieving the Green Zone. the transition to online communication األمانة التقوى Persistence ( ) and Fulfillment and beliefs that our people embody with core capabilities and competencies authority that focuses on recognizing At year-end, we reached a total of 6,893 working and training, both the المجاهدة ( ). Drawn from our rich Islamic through further team-building activities through the development of long-term outstanding high-trust, high-performing Saudi citizens across HQ, SFC and Panda, management and employees of the ّالرب heritage, these values were instrumental and synergies across the Group, Talent Acquisition and Development workplace cultures around the world. accounting for 37% of our total workforce Group have not only succeeded in in keeping us focused on our strategic including via our Sela employee social Strategies. and an increase of 21% over 2019. executing their assigned projects and goals and day-to-day duties, both as scheme, team iftars during Ramadan By maintaining our exceptional employee tasks, but also rapidly increased their individuals and as a Group, throughout and Eid, and Saudi National Day value proposition throughout the crisis, we personal and professional development the challenging events of 2020. Diversity celebrations. reaffirmed our position as a competitive curves as a result, as has been reflected employer of choice in the region’s food and At Savola, we consider our diversity to be in the annual results of the Group. Building on the foundations established retail industry, with a rising retention rate that one of our key strengths and a crucial in 2020, as a consequence of the rapid reached 91% in 2020, up from 89% in 2019. element in our strong performance and In Savola Foods Company, we delivered shift to remote working for suitable corporate ethos. We are broadly the second round of our Executive functions and roles, Savola will drive With a view to further enriching our credentials recognized for our gender inclusive policies Leadership Program, “Iqtedaa,” in 2020 further automation, digitization and in this regard, we launched a Long-Term and female empowerment credentials with in partnership with McKinsey & Company, process reengineering in the coming Incentive Program in 2020 – the Align women accounting for 1,285, or 7%, of our with 30 participants at Director and year. New technologies and reporting Program. This comprehensive raft of workforce at end-2020. Executive Director levels. In addition, tools will be implemented across all inducements aims to reward top executives for professional development and capability Meanwhile, our Makeen program functions and units to maximize achieving the Group’s strategic objectives, and building activities continued across all continued to grow and have a positive efficiency, streamline business processes to retain key talents in mission critical roles. levels via virtual delivery methods impact for Savola and the communities we and standardization, and increase throughout the year. Our Long-Term Incentive Program (LTIP), the serve. Since 2010, Makeen has focused on productivity. Align Program, is an innovative approach to increasing the number of disabled people retention that will be extended in the future to in private sector employment. During this other areas. Savola purchased 341,675 shares year, it continued to offer multiple free at SAR 48.32 per share, for a total value of training programs to government more than SAR 16.5 million (USD 4.4 million), organizations, NGOs and private sector to keep them as treasury shares under the first companies on good conduct in their tranche of the LTIP. interactions with disabled people.
50 The Savola Group Annual Report 2020 51 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.
52 The Savola Group Annual Report 2020 53 OVERVIEW
CSR and Sustainability OUR VISION OUR MISSION Savola World Savola World aspires to Savola World is a community be a leading development development foundation, Foundation foundation making a focused on specialized areas, sustainable social impact. seeking to build strategic
partnerships with different STRATEGIC REVIEW sectors and to deliver Committed to Serving developmental programs and sustainable solutions corresponding to local Our Community community requirements. DIRECTORS’ REPORT
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 Sustainability plays a central role in our business, our industry and structure for the foundation programs. the mindsets of our organization and its people. We therefore undertake a broad variety of initiatives to deliver a cleaner, greener Savola World Foundation Programs company through our newly established flagship CSR body, the FINANCIAL STATEMENTS Supporting Emerging Businesses Waste Reduction Others Savola World Foundation. These initiatives aim to deliver lasting to Achieve Growth in GDP • Consumer and supply chain • Makeen - people with disabilities change for our people, the Kingdom and the community we serve. waste reduction program (PWD) enablement program Developing Youth Skills • Savola companies waste • Ataa - volunteers engagement reduction program program Our values, strategy and actions are all These included distributing 20,000 food private sector entities, and broadens the • Vocational and technical skills • B2B sustainability awareness influenced by our commitment to baskets to needy families in neighborhoods scope of its engagement to include new development program program sustainability and social responsibility, severely affected by the virus across the sectors beyond food and retail. which permeate every aspect of our Kingdom of Saudi Arabia, in coordination business. We are proud of the considerable with relevant governorates, and producing a The Foundation is primarily funded by Savola progress we have made in this area to date, series of viral awareness videos aimed at and is managed by a Board of Trustees that but recognize that in order to respond building collective public awareness via replaces Savola’s CSR Committee. We have effectively to sustainability challenges we social media with regard to measures to also already begun working alongside a The Materiality Process must continue to strengthen our prevent the spread of COVID-19. variety of highly qualified, internationally engagement with stakeholders and apply acclaimed experts in order to maximize the At Savola, we conducted a comprehensive materiality An important outcome of the assessment is the development impact of our programs and self-sustaining assessment to better understand the needs and expectations of Savola Group’s materiality matrix, which illustrates all the new tools to enhance our sustainability A Steadfast Foundation revenue streams, with a particular focus on of our stakeholders, and to take into account a broader range material issues and their prioritization. As well as demonstrating goals. for Further Action social awareness campaigns, coaching and of national, regional and global challenges, trends and our commitment to sustainability, the matrix represents an Building on the considerable success of As the extent and severity of the COVID-19 training. approaches. invaluable tool for risk management and opportunity our Savola World platform – established in pandemic became clear, we immediately identification, which has revealed 30 material topics across our 2017 with the aim of promoting socially Core areas of interest for the Foundation mobilized to assist the efforts of the Ministry We engaged with both internal and external stakeholders to 5 strategic pillars: Employees, Community, Our sector, responsible behavioral change across the will be business assistance, youth skills of Health to combat the spread of identify critical sustainability issues, and consulted international Environment and Business. COVID-19. Leveraging our leading position region – in late 2019 we transformed Savola development and waste reduction. We aim standards, frameworks and best practices to design and in the Kingdom’s food and retail industry, as World from a department into a standalone to provide technical and financial support to conduct the materiality assessment in accordance with the well as our network of partners and private foundation. In keeping with SMEs to optimize their businesses. The principles of the standards of the Global Reporting Initiative suppliers, Savola played a key role in international best practices established Foundation will also develop vocational and (GRI). This process included the following stages: preserving the food security of the people among corporate bodies concerned with technical skills in young people to assist and community across the country in the sustainability, the Savola World Foundation them in entering the Kingdom’s labor face of the crisis, ensuring the continued is now a private foundation under the market, and continue Savola’s extensive supply of essential goods throughout. supervision of the Ministry of Human engagement in encouraging businesses and Identification Prioritization Validation and Communication Resources and Social Development. individuals to rationalize consumption and Approval We also ramped up our support for social reduce waste by introducing long-term programs during the year. Given the This transformation enables the Foundation behavior change to create a more Identification of Assessment and Adherence to best Communication via immense economic and social upheaval to champion more effectively the sustainable society. potential material ranking by internal practices, standards, the Sustainability caused by the pandemic, we allocated sustainability and social development topics and external frameworks, strategic Report SAR 10 million to assist communities across objectives of Saudi Vision 2030 and the UN stakeholders direction the nation, supporting the national Health Sustainable Development Goals (SDGs). It Endowment Fund and engaging in our own also allows it to seek funding from, and form Validation of topics relief initiatives. partnerships with, both government and
54 The Savola Group Annual Report 2020 55 OVERVIEW
CSR and Sustainability STRATEGIC REVIEW Our Current Programs include the following:
Other engagement activities during 2020 Additionally, Makeen participated in several Meanwhile, our Makeen program – which Alignment with International Goals Sustainability Reporting developed by the Makeen DIRECTORS’ REPORT workshops to promote digital accessibility works to broaden access to the workplace and Standards Global Reporting Initiative (GRI); Standard & Our enduring commitment to empowering included participation in the global for persons with disabilities, such as the for people with disabilities (PwD) – will play Poor’s Transparency and Disclosure people with disabilities across the Kingdom initiative “purple light up” by capturing and Our strategic commitments to sustainability virtual workshop titled “Concepts and a role across the full range of initiatives Standards, and the 17 UN Sustainable is known throughout our industry. Savola is sharing Savola Group’s experience in and social responsibility, are informed by Trends of Digital Accessibility” and the rolled out by the Foundation, as will our Development Goals (SDGs). one of the founders of the Qaderoon recruiting persons with disabilities via the the objectives and best practices of “Qualifying Applications on Smart Devices Negaderha waste prevention and our Business Disability Network of employers Makeen program. The resultant short film international frameworks and global Our strategy can be linked to 6 out of the 17 to be accessible for persons with employee volunteering program. and holds a Gold Category Mowaamah was broadcast worldwide during the initiatives, including the Standards for SDGs: Disabilities” workshop. Certificate for the advancement of people International Day of Persons with with disabilities. Disabilities on 3 December 2020. Delivering on Saudi Vision 2030 Makeen also took part in a workshop Savola strategy in the field of sustainability, organized by the Prince Mishaal bin Majid FINANCIAL STATEMENTS This commitment is embodied by our We also launched the Mowaamah Platform embodied by Savola World Foundation, bin Abdulaziz Center for Social and Makeen program, which is dedicated to via the Savola intranet. The platform shares mutual objectives with various local Humanitarian Research under the title “The increasing the number of disabled people provides valuable resources for all the authorities and government bodies, Ensure inclusive and quality Contribution of the Private Sector in SDG 4: in private sector employment. Since its individuals interested in building their including, most importantly, Saudi Vision Employment of Persons with Disabilities education for all and promote inception in 2010, Makeen has recruited knowledge and practices on various 2030. Our efforts are therefore closely - Reality - Obstacles - Requirements for lifelong learning 1,221 employees with disabilities and disability-related issues including: etiquette aligned with the long-term success of Saudi Success” and in a workshop organized by offered multiple free training programs to and guidelines; policies and procedures; Arabia outlined in this blueprint for the the General Presidency for the Affairs of the government organizations, NGOs and the concept of universal accessibility; web future of the Kingdom based on 3 pillars: Grand Mosque and the Prophet’s Mosque private sector companies on good conduct accessibility (W3C Standards); and services SDG 6: Ensure access to water and under the title “The Total Accessibility in their interactions with disabled persons. and support programs. • A vibrant society; sanitation for all Program in the Two Holy Mosques” in • A thriving economy; and Makeen’s online portal, which brings Also, accreditation was achieved from which Makeen made several proposals to • An ambitious nation. together disabled job seekers and private Technical and Vocational Training facilitate access to the built environment, Corporation about the training content services and communication to empower In line with this agenda, Savola’s growth sector employers, has facilitated the employment of many people with of the mentor and buddy program. persons with disabilities. strategy focuses on initiatives that directly SDG 7: Ensure access to affordable, disabilities since its establishment in 2017, benefit the Kingdom’s socio-economic reliable, sustainable and modern energy Makeen program also participated in the To enhance community awareness of development whilst building a prosperous including 51 in 2020. for all celebration of the International Day of various disability issues, Makeen program nation and a more dynamic, robust In responding to the COVID-19 pandemic, Persons with Disabilities, which falls on produced a set of infographic films in both economy. Makeen produced infographic videos 3 December every year through social Arabic and English developed with media, and launched an infographic film on inclusive communication standards such as We have strengthened our relationships with about safety tips and measures during the SDG 8: Promote inclusive and this occasion entitled “Not all disabilities sign language and written text. It carefully selected partners and distinguished pandemic specifically for persons with sustainable economic growth, are visible” to spread awareness in society addressed a variety of issues including shareholders and investors, with the aim of physical, hearing, visual and intellectual about the different types of disabilities. It Introduction to the Makeen program, goals ultimately satisfying the economic and social employment and decent work for all disabilities. We also participated in a virtual also participated in several virtual forums and services provided, the feasibility of aspirations of Saudi Vision 2030. Meanwhile, conference arranged by GBDN-ILO titled such as “Vision” and “Ibsar” forum with employing persons with disabilities, the we continue to contribute to Saudi society “Business Leadership in Disability Inclusive associations of persons with disabilities mentor and buddy program, the universal through our Makeen PwD program, Sela Responses to COVID-19”, and a virtual SDG 9: Build resilient infrastructure, such as World Sight Day and White Cane accessibility program and effective family program, Tawer employee seminar on “presenteeism, psychological promote sustainable industrialization Day to increase community awareness and communication with people with mobility, engagement scheme, housing loans for health and work performance during the and foster innovation relevant bodies on the rights of persons hearing, visual and intellectual disabilities Saudi employees, Takaful insurance pandemic”. with disabilities and to praise their (autism). provision and Tawoon Fund. achievements and their social and economic role in society and in national SDG 12: Ensure sustainable development plans. consumption and production patterns
56 The Savola Group Annual Report 2020 57 OVERVIEW
CSR and Sustainability STRATEGIC REVIEW
Negaderha
Negaderha Ataa As we work to integrate volunteering into CSR and Sustainability in 2021 In particular, through our Makeen program, reduce waste, particularly given the DIRECTORS’ REPORT The Negaderha program is our food waste Corporate volunteering in Savola took our corporate culture, Savola incorporated We remain wholly committed to supporting we will continue to support the specific disruption to global supply chains caused management and reduction scheme that center stage in 2019. We are proud of our volunteering into our annual employee the Kingdom in its efforts to stem the needs of persons with disabilities in facing by the pandemic. was developed to address this nationally achievements in this field, including the performance indicators. We also designed effects of the ongoing COVID-19 pandemic the ongoing threat from COVID-19, and Throughout 2021, Savola will continue to important problem. Through this program, launch of the Group’s volunteering program, activities that will contribute to the personal on the health, wellbeing and economic assist organizations in implementing roll out the complete raft of functions of our we currently target 2 main segments of building valuable partnerships and and professional growth of our employees progress of the country. Therefore, Savola PwD-specific measures to protect their new Savola World Foundation, including society – households and the HORECA increasing the participation of our and aligned the volunteering program with will continue to allocate funds and commit workers. the selection of its new Board of Trustees (hotels, restaurants and cafés) industry – employees in volunteering activities. Our the Saudi Vision 2030 goal of expanding the resources to supporting communities We will also deliver new initiatives under and the activation of its full program of among whom we raise awareness of the employees achieved 787 volunteer hours in impact of the non-profit sector. Key activities throughout the nation in 2021, providing included: our Negaderha program to ensure the initiatives. As we do so, we will continue to dangers of food waste. the 3 months after introducing the program. assistance in any way we can to support the FINANCIAL STATEMENTS food security of the nation through further support the Kingdom in meeting its Saudi government and other authorities in their education to rationalize consumption and Vision 2030. In view of the food security implication of efforts going forward. the COVID-19 crisis in 2020, Negaderha introduced a series of graphic videos about Volunteering Number of Partners Impact and consumer and food safety through social Activities Volunteers Beneficiaries media, covering the full consumption cycle, 10 Namaa Families in need – from shopping tips to food sanitizing, Distributing Ramadan food Association 250 family members storage and cooking. baskets to beneficiaries benefited
Negaderha also made progress towards Packing and distribution 37 Itaam Association Families in need – planning and implementing its initiative of meals (Saudi Food 150 family members for primary school children. The initiative Bank) benefited tackles food waste on a household level and promotes knowledge and a culture Distributing Ramadan Charity 12 29 charitable Families in need – of food waste reduction amongst children Company products (example societies in 1,500 family aged 6 to 10 years old. By introducing a sugar and oil) to beneficiaries various regions in members benefited superhero character that educates children on an annual basis the Kingdom by embracing adventures and delivering Visiting King Fahad Hospital 23 Namaa 100 patients awareness messages tailored for children, Association benefited our superhero will take children on exciting journeys on food waste reduction. The first Visiting Hisham Attar 15 Hisham Attar 50 kidney failure episodes of this groundbreaking initiative Center for Dialysis Center patients benefited will launch in 2021. Visiting Neda Al Amal 39 Neda Al Amal 100 mental disability Rehabilitation Center Rehab Center patients benefited Delivering educational 7 Dallah Academy 200 people workshops for Volunteering benefited (students, specialists and enthusiasts)
In 2020, all volunteering activities were suspended due to the pandemic.
58 The Savola Group Annual Report 2020 59 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.
60 The Savola Group Annual Report 2020 61 OVERVIEW Directors’ Report Main Activities and Financial Disclosures
1) The Group’s Main Activities: Ownership % Capital STRATEGIC REVIEW The Group has a broad portfolio of activities. In the foods sector, this is mainly the production, marketing and distribution of edible Company Country of Core Country (direct and (nominal Number oils, vegetable ghee, sugar, pasta, baked goods, specialty fats, seafood and frozen food. The retail sector operates a chain of retail No. name Incorporation activities presence indirect) share value) of shares outlets. Savola also has significant investments in leading Saudi non-listed and listed companies such as Almarai Co. and Herfy Food 12. Savola Industrial KSA Holding KSA 100% SAR 205,907,000 205,907 Services Co. which operate in the food and retail sectors, and real estate development companies such as Knowledge Economic City, Investment Co. (SIIC) Company King Abdullah Economic City (Emaar), and Kinan International for Real Estate Development Co., as well as holdings in private equity funds. 13. El Maleka for Food Egypt Manufacturing of Egypt 100% EGP 288,898,960 28,889,896 Industries Co. Pasta
Savola‘s subsidiaries, sister companies, investments, activities and country of incorporation: 14. Savola Foods Emerging British Virgin Holding Offshore 95.43% SAR 130,000,000 13,000,000
Markets Co. (SFEM) Islands (BVI) Company Company DIRECTORS’ REPORT Ownership % Capital Company Country of Core Country (direct and (nominal Number No. name Incorporation activities presence indirect) share value) of shares 15. Afia International KSA Trading and KSA 100% SAR 6,500,000 6,500 1. Direct subsidiaries of the Company: Distribution and Marketing Distribution Co. a) Operating subsidiaries: 16. Savola Foods for Sugar Cayman Dormant Offshore 100% USD 50,000 5,000 1. Savola Foods Co. Kingdom Foods Holding 100% SAR 2,200,000,000 220,000,000 Co. Islands Company Company of Company Saudi Arabia that manages 17. Savola Foods International United Arab Holding UAE 100% AED 500,000 500 (KSA) investment in
Ltd. (SFCI) Emirates Company FINANCIAL STATEMENTS foods sector (UAE) in KSA and overseas 18. International Foods KSA Manufacturing of KSA 100% SAR 107,000,000 10,700,000 Industries Co. Specialty Fats 2. Panda Retail Co. KSA Retail KSA and 98.87% SAR 1,480,000,000 148,000,000 Egypt 19. Seafood International Two UAE Seafood UAE 60% AED 100,000 100 FZCO Products Trading 3. Good Food Co. (GFC) KSA Holding KSA and 100% SAR 10,000,000 100,000 & Distribution Company some GCC countries 20. Afia Foods Arabia Co. KSA Holding KSA 100% SAR 1,000,000 1,000 Company 4. Al Matoun International KSA Real Estate KSA 80% SAR 100,000,000 100,000 for Real Estate 21. Al Maoun International KSA Holding KSA 100% SAR 1,000,000 1,000 Investment Holding Co. Holding Co. (Al Maoun) Company
5. Herfy Food Services Co. KSA Restaurants and KSA, 49% SAR 646,800,000 64,680,000 22. Marasina International KSA Holding KSA 100% SAR 200,000 200 Manufacturing Bangladesh Real Estate Investment Company Bakery Products and some Co. (Marasina) GCC 23. Commodities Sourcing KSA Trading KSA 100% countries SAR 5,000,000 500,000 Company for Trading Company 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 Company KSA Holding KSA 100% SAR 1,000,000 10,000 24. Savola Behshahr Co. (SBeC) Iran Holding Iran 90% IRR 740,000,000 Company Company 740,000,000,000 7. Al Utur Arabian Co. for KSA Holding KSA 100% SAR 1,000,000 10,000 25. Malintra Holdings Ltd. Luxembourg Dormant Offshore 100% EUR 1,250,000 1,250 Commercial Investment Company Company Company
26. Savola Foods Ltd. (SFL) BVI Holding Offshore 100% USD 52,000 52,000 8. Madarek Investment Co. Jordan Holding Jordan 100% JOD 1,000,000 1,000,000 Company Company Company 27. Afia International Co. Jordan Dormant Jordan and 98.57% JOD 8,000,000 8,000,000 9. United Complexes KSA Dormant KSA 100% SAR 4,000,000 400 – Jordan Company (under Levant Development Co. Company Liquidation) 10. Al Matana Holding Co. KSA Holding KSA 100% SAR 50,000 5,000 Company 28. Inveskz Inc. BVI Dormant Offshore 90% USD 138,847 138,847 Company Company 2. Savola Foods Company (SFC): 29. Afia Trading International BVI Dormant Offshore 100% USD 500,000 500,000 a) Subsidiaries controlled through SFC: (% referred to SFC’s direct and indirect ownership – SFC is 100% owned by Savola Group) Company Company 11. Afia International Co. (AIC) KSA Manufacturing of KSA, Egypt, 95.19% SAR 500,000,000 50,000,000 30. Savola Foods International BVI Dormant Offshore 100% USD 50,000 50,000 Edible Oils Iran, Turkey, Company Company Jordan
62 The Savola Group Annual Report 2020 63 OVERVIEW STRATEGIC REVIEW DIRECTORS’ REPORT FINANCIAL STATEMENTS 65 50 500 500 500 200 100 300 1,000 5,000 5,000 3,000 Number 50,000 27,000 of shares 181,500 50,000,000
Capital (nominal USD 100 share value) share AED 2,000 USD 50,000 BHD 20,000 SAR 500,000 SAR 500,000 SAR 500,000 AED 300,000 IRR 1,000,000 SAR 5,000,000 SAR 5,000,000 AED 3,000,000 SAR 27,000,000 EGP 50,000,000 AED 181,500,000 51% 51% 51% 51% 51% 51% 51% 100% 100% 100% 100% 100% 100% 100% indirect) Savola (direct and (direct direct %) direct including 95% (99% Ownership % Country presence Iran Offshore Offshore Company UAE KSA KSA Egypt KSA KSA KSA Bahrain UAE UAE UAE UAE KSA (% referred to Al Maoun and Marasina’s ownership; both companies are to Al Maoun and Marasina’s (% referred Core activities Food and Confectionery Holding Company Trading and Trading Distribution Retail Services and Maintenance Retail Dormant Company Dormant Company Frozen Food Frozen Manufacturing Trading and Trading Distribution Holding Company Trading and Trading Distribution Trading and Trading Distribution Frozen Food Frozen Manufacturing Trading and Trading Distribution (% referred to SFCI’s ownership; SFCI is 100% owned by SFC) to SFCI’s (% referred Country of Incorporation Iran Cayman Islands UAE KSA KSA Egypt KSA KSA KSA Bahrain UAE UAE UAE UAE KSA Company name Modern Royan Behtaam Kaveh Co. Middle East Technology Middle East Technology Ltd. Venture Alofog Trading DMCC Alofog Trading Giant Stores Trading Co. Trading Giant Stores Panda for Operations, Maintenance & Contracting Services Co. Panda International for Retail Trading Panda Bakeries Co. Lebanese Sweets and Bakeries Co. Variety Foods Factory Co. Variety Al Helal for Import & Export Co. Al Kabeer Holding Co. Best Foodstuff Trading Co. Trading Best Foodstuff Sahar Enterprises Co. Sahar Food Industries Co. Al Ahsan Trading Co. Al Ahsan Trading (% referred to Giant Stores Trading Co. Ownership; Giant Stores Trading Trading Co. Ownership; Giant Stores Trading to Giant Stores Co.: (% referred Trading Giant Stores through Subsidiaries controlled Co. is 100% owned by Panda Subsidiaries controlled through Al Maoun and Marasina: Al Maoun through Subsidiaries controlled 100% owned by SFC) No. SFCI: through j) Subsidiaries controlled 46. 47. k) 48. 3. Panda Retail Co. (Panda): ownership; Panda is 98.87% owned by Savola)) and indirect direct to Panda’s Panda: (% referred through a) Subsidiaries controlled 49. 50. 51. 52. b) 53. 4. Al Kabeer Group Companies: 4. Al Kabeer Group ownership; GFC is 100% owned by Savola Group) and indirect direct to GFC’s GFC: (% referred through a) Subsidiaries controlled 54. 55. 56. 57. 58. 59. 60. 1,000 Number 50,000 of shares 100,000 395,000 281,838 225,000 460,000 2,630,128 3,028,071 30,930,300 45,800,000 100,000,000 500,000,000 443,356,900 1,023,000,000
IRR IRR IRR DZD Capital (nominal share value) share USD 1,000 USD 50,000 3,028,071,000 TRL 4,433,569 TRL 26,301,280 USD 22,500,000 IRR 100,000,000 SDG 45,800,000 100,000,000,000 500,000,000,000 1,023,000,000,000 MAD 46,000,000 SAR 395,000,000 EGP 154,651,500 EGP 281,838,000 90% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% indirect) 79.9% SFC %) 99.95% 74.48% (71.66% 68.01 % (direct and (direct including Ownership % continued Country presence Turkey Iran Offshore Offshore Company Iran Iran Iran Egypt Turkey KSA Egypt Offshore Offshore Company Egypt Morocco Sudan Algeria Trading and Trading Distribution Core activities Holding Company Holding Company Trading and Trading Distribution Manufacturing of Edible Oils Manufacturing of Food and Confectionery Manufacturing of Edible Oils Manufacturing of Edible Oils Manufacturing of Sugar Manufacturing of Sugar Dormant Company Agro Cultivation Agro Manufacturing of Edible Oils Manufacturing of Edible Oils Manufacturing of Edible Oils (% referred to KUGU’s direct and indirect ownership; KUGU is 100% owned by AIC) and indirect direct to KUGU’s (% referred (% referred to ASCE ownership; ASCE is 73.14% owned by SFC directly and indirectly) to ASCE ownership; ASCE is 73.14% owned by SFC directly (% referred (% referred to SBeC’s ownership; SBeC is 90% owned by AIC) to SBeC’s (% referred (% referred to SFEM’s direct and indirect ownership; SFEM is 95.4% owned by SFC) indirect and direct to SFEM’s (% referred (% referred to SFLs ownership; SFL is 100% owned by AIC) (% referred (% referred to SIIC’s ownership; SIIC is 100% owned by SFC) ownership; SIIC is to SIIC’s (% referred Iran Country of Incorporation Turkey Cayman Islands Iran Iran Iran Egypt Turkey KSA Egypt Cayman Islands Egypt Morocco Sudan Algeria Tolue Pakshe Aftab Co. Pakshe Tolue KUGU Gida Yatum ve KUGU Gida Yatum A.S (KUGU) Ticaret Company name Aseel Food – Holding Co. Savola Behshahr Sugar Co. Behshahr Industrial Co. Notrika Golden Wheat Co. Afia International Co. Egypt Savola Gida Sanayi ve Anonim Şirketi Ticaret United Sugar Co. (USC) Alexandria Sugar Co. – Egypt (ASCE) Beet Sugar Industries Alexandria United Co. for Land Reclamation Savola Morocco Co. Savola Morocco Savola Edible Oils (Sudan) Co. Afia International Co. – Algeria The Group’s Main Activities continued The Group’s 34. 31. No. 32. 35. SBeC: through c) Subsidiaries controlled 33. 36. d) Subsidiaries controlled through SFL: through d) Subsidiaries controlled 37. e) Subsidiaries controlled through KUGU: through e) Subsidiaries controlled 38. f) Subsidiaries controlled through SIIC: through f) Subsidiaries controlled 39. (% referred to USC’s direct and indirect ownership; USC is 74.48% owned by SIIC) and indirect direct to USC’s USC: (% referred through g) Subsidiaries controlled 40. 41. h) Subsidiaries controlled through ASCE: through h) Subsidiaries controlled 42. i) Subsidiaries controlled through SFEM: through i) Subsidiaries controlled 43. 44. 45. Savola‘s subsidiaries, activities investments, sister companies, incorporation and country of continued Main Activities and Financial Disclosures Disclosures Financial and Main Activities 1) Directors’ Report Directors’ The Savola Group Annual Report 2020 The Savola Group 64 OVERVIEW STRATEGIC REVIEW DIRECTORS’ REPORT FINANCIAL STATEMENTS 67 2016 911 2020 (363,287) 4,652,964 2020 26,330,802 17,894 (21,677,838) 476 2017 2019 2019 18,119 4,394,115 1,025,618 23,830,475 (19,436,360) 2018 2018 520 14,231 2017 2017 1,026 13,629 2018 (520,380) 3,897,957 21,814,563 2016 (17,916,606) 2016 16,038 363 2019 0 0 800 600 400 200 Net Profit Liabilities 200 400 600 5000 1200 1000 20000 15000 10000 475,630 4,504,304 21,406,424 (16,902,120) 2020 2020 2020 21,702 27,058 910,802 4,640,383 21,701,941 (17,061,558) 2019 2019 21,406 26,658 2018 2018 21,815 22,252 2017 2017 23,830 23,337 2016 26,331 2016 25,287 0 0 Comparison of the Company’s assets and liabilities (SAR million): Comparison of the Company’s Consolidated Performance of the Group 5,000 5000 (loss) Net Profit Gross Profit Gross Cost of Revenues Item (SAR ‘000) Revenues 30,000 25,000 20,000 15,000 10,000 30000 25000 20000 15000 10000 2) 2–1) for the last 5 years and liabilities assets results and financial of the Summary Company’s a) (SAR million): financial results of the Comparison Company’s Revenues b) Assets 500 100 100 1,250 Number 10,000 of shares 200,000 150,000 260,000 15,600,000 83,000,000 50,000,000 86,840,292 60,000,000 50,000,000 169,400,000 339,300,000 850,000,000 1,000,000,000
SAR SAR Capital (nominal share value) share USD 50,000 USD 10,000 USD 125,000 AED 500,000 AED 750,000 AED 100,000 OMR 150,000 3,393,000,000 10,000,000,000 SAR 20,000,000 JOD 86,840,292 SAR 830,000,000 SAR 600,000,000 SAR 500,000,000 USD 156,000,000 USD 260,000,000 SAR 1,694,000,000 SAR 8,500,000,000 5% 40% 49% 51% 40% 50% 15% 100% 100% 100% 100% indirect) 2.07% 11.5% 0.87% (Savola 29.99% 33.82% 34.52% 14.81% (direct and (direct effective effective Ownership % ownership continued Country presence KSA UAE Egypt UAE KSA UAE KSA Oman Tunisia KSA Offshore Offshore Company UAE Offshore Offshore Company KSA KSA Jordan KSA KSA Real Estate Development Core activities and Trading Distribution Manufacturing of Sugar Frozen Food Frozen Manufacturing Real Estate Development Investment Company Real Estate Food Distribution Fund Management Fresh Food Fresh Products Holding Company Seafood Trading Products & Distribution Holding Company Real Estate Development Real Estate Real Estate Development Investment Funds (under Liquidation) Investment Management KSA Country of Incorporation UAE Egypt UAE KSA UAE KSA Oman Republic of Tunisia (Tunisia) KSA Cayman Islands UAE Cayman Islands KSA KSA Jordan KSA KSA
Kinan International for Real Estate Development Co. Al Sabah Foodstuff Al Sabah Foodstuff Enterprises Co. Company name United Sugar Co. Egypt Cascade Marine Foods Cascade Marine Foods Co. Al Seera City Co. for Real Estate Development Cascade Investments Limited Knowledge Economic City Developers Co. Best Foods Co. Intaj Capital Ltd. Almarai Co. United Edible Oils Holding Oils Edible United Ltd. Seafood International One FZCO Seafood International Holding Co. Knowledge Economic City King Abdullah Economic City Arab Phoenix Holdings Co. Joussor Holding Co. Swicorp Co. (% referred to Al Kabeer Holding direct and indirect ownership; Al Kabeer ownership; and indirect to Al Kabeer Holding direct Holding Al Kabeer Co.: (% referred through Subsidiaries controlled Holding is 51% owned by GFC) Investments available for sale: Listed: The Group’s Main Activities continued The Group’s 66. b) 61. No. 67. 62. 68. 63. 69. 64. 70. 5. Investees: (investments in sister companies) 65. 71. 72. 73. 74. 6. 75. 76. Unlisted: 77. 78. Savola‘s subsidiaries, activities investments, sister companies, incorporation and country of continued Main Activities and Financial Disclosures Disclosures Financial and Main Activities 1) Directors’ Report Directors’ The Savola Group Annual Report 2020 The Savola Group 66 OVERVIEW STRATEGIC REVIEW DIRECTORS’ REPORT FINANCIAL STATEMENTS 69 3% 2019 0.9% 1.4% -3.9% 10.1% 26.9% 43,599 43,599 620,055 Variance % Variance (SAR ‘000s) 620,055 (414,519) 21,406,424 21,820,943 2020 64,791 36,077 351,867 136,079 150,997 295,517 36,077 (SAR ‘000s) 736,797 (159,438) 736,797 (SAR ‘000s) (403,874) 21,701,941 22,105,815 Variance (+) or (–) Variance 2019 et i ee di e i nd e et e u nd eetene t ood ood o en t eci t t t e e ood ed ood 639,357 (SAR ‘000s) 1,308,957 4,504,304 (3,834,704) 21,406,424 (16,902,120) 2020 704,148 (SAR ‘000s) 1,660,824 4,640,383 (3,683,707) 21,701,941 (17,061,558) Brands Al Kabeer, Tayebat Al Emarat, Tabarruk Tayebat Al Kabeer, activity contributions to 2020 consolidated revenues main Group Breakdown of sector and Breakdown Revenues Operational revenues – Other Operational revenues Operational expenses – Other Operational profit Gross profit Gross Cost of revenues Income statement Revenues Declaration: The Company did not announce any financial expectations during 2020 Total revenues Total Consolidated intercompany elimination Consolidated intercompany Gross revenues Gross Total otheractivities revenues Total Others Real estate – KSA Business line/country KSA and GCC food products frozen Total 2–3) Statement of any material differences in the operational results compared to the preceding year’s results year’s to the preceding compared in the operational results 2–3) Statement of any material differences 2019 2016* 99,032 39,397 38,382 163,656 510,492 346,548 948,169 250,436 350,196 725,460 678,241 (SAR ‘000s) 1,288,310 2,199,348 1,808,170 1,150,718 5,631,303 8,449,057 1,288,310 9,209,213 2,545,896 5,911,390 10,560,734 10,406,259 16,838,339 10,659,766 16,037,562 25,287,396 2017 2020 39,700 28,986 113,588 173,804 536,750 278,232 546,430 425,786 370,283 661,363 596,280 (SAR ‘000s) 4,986,982 8,642,368 6,678,054 1,076,083 2,050,980 1,715,067 1,219,898 16,659,276 1,076,083 8,643,559 2,329,212 5,535,107 13,629,350 23,337,330 11,499,711 11,613,299 2018 5,803,868 8,426,642 5,906,124 16,346,327 14,230,510 22,252,451 continued 2019 9,254,726 8,863,915 5,969,924 20,687,787 18,118,641 26,657,711 2020 9,709,974 8,183,856 6,456,800 20,601,584 17,893,830 27,058,384 Herfy, Doka Herfy, Hyper Panda, Panda Supermarket Panda Supermarket Pech-Pech Sava Vala, Culina, Margarina, El Maleka, Macaronto, Italiano El Maleka, Macaronto, Leeza John West, Al Osra Al Osra, Ziadah, Safaa, Nehar, Halla, Sweeva Al Osra, Ziadah, Safaa, Nehar, Brands Afia, Al Arabi, Olite, Shams, Sun Glow, Dalal, Nakeel Afia, Al Arabi, Olite, Shams, Sun Glow, Rawabi, Afia, Ganna, Slite, Helwa Afia Ladan, Aftab, Bahar, Sabah, Shams Al Tayeb, Afia, Hala Sirma, Afia Yudum, Afia, Oleor Geographical analysis of the Company’s and its subsidiary revenues and its subsidiary revenues Geographical analysis of the Company’s Comparison of the Company’s assets and liabilities assets and (SAR million) continued of theComparison Company’s Consolidated Performance continued of the Group Total liabilities Total Non-current liabilities Non-current Current liabilities Current Total assets Total Non-current assets Non-current Item (SAR’000s) assets Current Frozen food products Frozen Total fast food and restaurants Total Fast food Fast food and restaurants Total retail revenues retail Total Retail KSA Egypt Total baked food products – Central baked food products Total Asia – specialty fats and margarine Total KSA and Turkey foods revenues Total Total pasta products – Egypt pasta products Total – GCC and seafood products Total Egypt Egypt sugar and sweeteners revenues Total Sugar and sweeteners KSA, GCC and Yemen Egypt, Levant Central Asia Sudan Morocco Turkey Algeria edible oil and vegetable ghee revenues Total Business line/country Edible oil and vegetable ghee KSA, GCC and Yemen Below is the Group’s consolidated revenue for 2020 compared to the previous year business-wise (edible oils and vegetable ghee, previous to the for 2020 compared consolidated revenue Below is the Group’s based fast food, and specialty fats), including geographical analysis sector, retail food, sugar and sweeteners, pasta, seafood, frozen in countries: on availability of brands and products * All 2016 related figures were reclassified according to IFRS reclassified according were figures * All 2016 related 2–2) b) Main Activities and Financial Disclosures Disclosures Financial and Main Activities 2) Directors’ Report Directors’ The Savola Group Annual Report 2020 The Savola Group 68 OVERVIEW STRATEGIC REVIEW DIRECTORS’ REPORT FINANCIAL STATEMENTS 71 - - - 9,470 Balance Balance 20,782 14,986 31,875 93,690 17,630 13,704 70,280 24,587 15,993 Dec 2019 Dec 2019 31,875 25,463 24,587 137,280 173,048 195,304 5,638,027 - - - - - 3,642 9,769 Balance 11,507 47,687 23,600 17,378 Balance Dec 2020 61,098 23,600 27,110 15,705 50,000 150,000 150,000 162,835 Dec 2020 324,342 167,378 230,000 265,000 150,000 120,000 170,000 5,023,168 - - - - -
987 2020 paid in 3,479 3,935 9,470 Amount 46,003 31,875 13,988 Jan-20 Jan-20 Dec-20 Dec-20 Dec-20 Dec-20 Dec-20 Date issued Original
27,473 42,903 15,600 70,000 28,173 11,386 18,969 16,000 499,996 170,000 150,000 150,000 529,937 1 year 1 year 1 month 1 month 1 month 1 month 1 month Loan period 2017 2016 2014- 2013- Jan-18 Jan-18 Jan-16 Jan-19 Jan-19 Oct-19 Mar-10 Dec-20 Dec-18 Dec-20 Nov-15 Date issued 4 years 6 years 3 years 3 years 5 years 5 years 5 years 5 years 5 years 13 years 5.3 years 4-6 years 4.75 years Loan period Emirates NBD Saudi British Bank Bank National Commercial Samba Financial Group National Bank of Kuwait
Lender Samba Financial Group First Abu Dhabi Bank National Bank of Kuwait Saudi British Bank Al Rajhi Bank Saudi Industrial Development Fund Saudi British Bank Saudi British Bank***** Samba Financial Group National Bank of Kuwait Samba Financial Group Emirates NBD International Bank*** Commercial International Commercial Bank**** National Bank of Kuwait** Lender AUCR IFI Herfy Borrowing Borrowing company Afia – KSA El Maleka for Food Industries USC Afia – Egypt ASC Egypt Afia Intl. Co. – Egypt Afia International Co. Savola Group Borrowing company Borrowing Savola Group Co. Savola Group Loan was closed and December 2019 loan balance added to the other CIB loan (***). December 2020 loan balance increased due to the addition of the other CIB loan (****) balance of SAR 20,728,000 and December 2020 loan balance increased effect. due to currency Short-term loans of the Group and its subsidiaries, and their payment status as of 31 December 2020 (SAR ‘000s): Short-term loans of the Group December 2020 loan value changed due to currency effect December 2020 loan value changed due to currency 3 2 1 Approved facility is SAR 500 million, first drawdown was SAR 350 million in December 2019 and second drawdown was SAR 150 million 2019 and second drawdown 350 million in December facility is SAR 500 million, first drawdown was SAR Approved in January 2020 6. Savola Industrial Investment Co. 7. International Industries Co. Foods 8. Herfy Food Services Company long-term loans Total No. 3. 4. Pasta 5. Afia International Co. No b) * ** *** **** in 2020. to short-term borrowing ***** December 2019 loan balance reclassified - - - - - Balance 75,000 Dec 2019 600,000 993,000 480,000 252,000 300,000 350,000 759,000 218,750 160,000 235,000 1,000,000 4,952,750 - - - - - Balance 93,750 Dec 2020 450,000 300,000 150,000 210,000 250,000 500,000 300,000 693,000 300,000 200,000 1,000,000 4,446,750 dingly, all Group loans all Group dingly, ------2020 paid in Amount 42,000 50,000 66,000 75,000 150,000 993,000 480,000 125,000 160,000 300,000 150,000 294,000 300,000 500,000 300,000 750,000 800,000 300,000 200,000 300,000 480,000 500,000 400,000 1,500,000 1,000,000 Original amount ding to the requirements of the lending banks or ding to the requirements continued Jul-19 Jan-20 Jan-13 Oct-16 Sep-18 Feb-19 Dec-20 Dec-20 Dec-18 Dec-19 Dec-20 Dec-20 Dec-15 Dec-18 Dec-16 Nov-18 Date issued 3 years 3 years 7 years 7 years 7 years 2 years 5 years 7 years 7 years 2 years 7 years 7 years 5 years 5 years 6 years 2.08 years Loan period Gulf International Bank Samba Financial Group Saudi British Bank Saudi British Bank Al Rajhi Bank Sukuk Sukuk Gulf International Bank Bank Al Jazira Bank Al Jazira* Bank Al Jazira Saudi Investment Bank Saudi British Bank National Bank Commercial Gulf International Bank Saudi British Bank Lender Panda Borrowing Borrowing company Savola Group Details of long and short-termDetails of long and status loans and payment Consolidated Performance continued of the Group Long-term loans of the Group and its subsidiaries, and their payment status as of 31 December 2020 (SAR ‘000s): and its subsidiaries, and their payment status as of 31 December Long-term loans of the Group Savola Group 2. 1. No. Panda Retail Co. and deposits within Saudi Arabia are Shariah-compliant, as well as some arranged by overseas subsidiaries. Shariah-compliant, as well as some Arabia are and deposits within Saudi of 7 years. a total value of SAR 1.5 billion with a tenure by issuing Sukuk with completed its initial offering In January 2013, the Group at December 2019. In as has been classified as short-term loans and borrowings 2020 and accordingly in January The Sukuk matured of SAR 1 billion with a tenure with a total value Sukuk, under the new program, of its new completed the offering July 2019, the Group and Sukuk, which was redeemed issuance included SAR 507 million of the previous in July 2026. The of 7 years, which will mature to SAR 993 million. Certain loans SAR 1.5 billion from Sukuk decreased the nominal value of the previous exchanged. Accordingly, those in from which may differ and policies adopted in those countries, structure subject to arranged by overseas subsidiaries are Saudi Arabia. banks and financial institutions various commercial loans (short-term from long-term and for Group borrowings) Finance charges to With regards year. to SAR 429 million in the previous million compared SAR 279 market rates) reached during 2020 (at prevailing notes as a guarantee to usually signs promissory (see table below), the Group to its subsidiaries loan guarantees granted by the Group some of its subsidiaries’ loans, accor its own loans and a corporate guarantee for financial institutions. Details of long-term as follows: obtained in the normal and its subsidiaries and short-term course of business are loans of the Group a) 2–4) transactions whenever possible. Accor policy to adopt Shariah-compliant financial Savola has a long-standing 2–3) Statement of any material differences in the operational results compared to the preceding year’s results continued results year’s to the preceding compared in the operational results differences of any material 2–3) Statement year: to last for 2020 compared for the change in net profit The reasons gross attributed to the higher last year is mainly recorded to the net profit year 2020 compared for the in the net profit The increase expenses; and lower net finance cost. from associates; lower operating of profits higher share margins; due to higher sales and profits the zakat and tax in and tax expense; and the decrease was achieved despite of the higher zakat for the year 2020 The net profit prior year. in the of subsidiaries that was recorded to prior years’ assessments relating reversal provision Main Activities and Financial Disclosures Disclosures Financial and Main Activities 2) Directors’ Report Directors’ The Savola Group Annual Report 2020 The Savola Group 70 OVERVIEW STRATEGIC REVIEW DIRECTORS’ REPORT FINANCIAL STATEMENTS 73 Balance 5,625 Dec 2019 42,175 49,386 306,051 5 575 296 594 291 218 664 290 415 274 223 354 719 596 3,294 1,311 6,241 2,447 8,064 3,956 1,376 1,783 1,432 Balance 30,000 11,601 28,125 40,000 11,855 10,551 30,000 21,348 77,270 15,240 19,008 12,962 Dec 2020 23,244 28,125 14,900 297,004 186,714
Jul-20 Jul-20 Jan-20 Jan-20 Jan-20 Jan-20 Jan-20 Jan-20 Apr-20 Apr-20 Jun-20 Jun-20 Jun-20 Oct-20 Sep-20 Sep-20 Dec-20 Dec-20 Dec-20 Dec-20 Dec-20 Dec-20 Dec-20 Dec-20 Dec-20 Dec-20 Dec-20 Dec-20 Dec-20 Dec-20 Nov-20 Nov-20 Aug-20 May-20 May-20 234,645 Date issued
1 year 1 year 1 year 1 month 1 month 1 month 1 month Loan period 8 months 3 months 3 months 3 months 3 months 9 months 9 months 9 months 9 months 9 months 9 months 9 months 9 months 9 months 9 months 9 months 9 months 9 months 9 months 18 months 18 months 18 months 3-4 months 3-4 months 3-4 months 3-4 months 3-4 months 3-4 months
Saudi British Bank Hongkong and Shanghai Banking Corp. National Bank of Kuwait Export Development Bank of Egypt (EBE) Dubai Islamic Bank National Bank of Fujairah Habib Bank AG Zurich Emirates NBD Saudi British Bank National Commercial Bank National Commercial National Bank of Kuwait First Abu Dhabi Bank Bank Chartered Standard Hongkong and Shanghai Banking Corp. Commercial International Bank Commercial National Bank of Kuwait Hongkong and Shanghai Banking Corp. Lender Attijari Wafa Bank Attijari Wafa Arab Bank Arab Bank Attijari Wafa Bank Attijari Wafa 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 Herfy Food Services Co. Seafood International Two Seafood International Two FZCO Sahar Enterprises LLC Savola Foods Emerging Co. Savola Foods Emerging El Maleka For food Industries Co. United Sugar Co. Alexandria Sugar Co. Alexandria United Co. for Land Reclamation Borrowing company Borrowing Savola Edible Oils (Sudan) Ltd. Savola Edible Oils (Sudan) 9 16 14 15 10 11 12 13 Seafood International Two FZCO Seafood International Two Pasta Savola Industrial Investment Co. Good Food Co. No - Balance Dec 2019 1,206,227 76 9,941 3,379 3,980 5,109 5,106 8,006 9,376 7,433 7,433 4,197 4,437 5,459 Balance 63,935 34,717 51,710 23,888 40,000 27,872 23,137 21,081 13,900 26,760 19,327 17,819 10,820 35,454 25,543 19,349 45,750 18,902 11,780 Dec 2020 40,000 1,079,241 Jul-20 Jul-20 Jul-20 Jul-20 Jan-20 Jan-20 Jan-20 Jan-20 Jan-20 Jun-20 Oct-20 Sep-20 Sep-20 Sep-20 Sep-20 Sep-20 Sep-20 Dec-20 Dec-20 Dec-20 Dec-20 Nov-20 Nov-20 Nov-20 Nov-20 Nov-20 Nov-20 Aug-20 Aug-20 Aug-20 Nov-20 Nov-20 Date issued
1 year 1 year 1 year 1 year 1 year 1 year 1 year 1 year 1 month Loan period 6 months 6 months 6 months 6 months 3 months 3 months 3 months 3 months 3 months 6 months 6 months 3 months 6 months 6 months 6 months 6 months 6 months 3 months 6 months 6 months 6 months 6 months 6 months continued Arab Bank Fransabank El Djazair Credit du Maroc Credit Hongkong and Shanghai Banking Corp.
Saudi British Bank Lender Hongkong and Shanghai Banking Hongkong and Shanghai Corp. Bank Mellat First Abu Dhabi Bank National Bank of Egypt Bank Egyptian Saudi Finance (El Baraka Bank) Karafarin Bank Hongkong and Shanghai Banking Corp. Bank for Reconstruction European & Development VakifBank Hongkong and Shanghai Banking Corp. Hongkong and Shanghai Banking Corp. Hongkong and Shanghai Banking Corp. Hongkong and Shanghai Banking Corp. Bank Pasargad Middle East Bank Saman Bank Exchange Pirouzan Hongkong and Shanghai Banking Corp. Hongkong and Shanghai Banking Corp. Hongkong and Shanghai Banking Corp. Garanti Investment Credit Ziraat Bank Bank for Reconstruction European & Development Hongkong and Shanghai Banking Corp. Hongkong and Shanghai Banking Corp. Bankasi ve Kredi Yapi Hongkong and Shanghai Banking Corp. Afia Intl. Co. – Algeria Savola Morocco Co. Savola Morocco Afia International Distribution and Marketing Co. Afia International Co. Afia International Distribution & Marketing Co. Behshahr Industrial Co. Savola Gida Sanayi ve AS Ticaret Borrowing company Borrowing Details of long and short-termDetails of payment status continued loans and Consolidated Performance continued of the Group 7 8 6 4 5 No 2–4) Main Activities and Financial Disclosures Disclosures Financial and Main Activities 2) Directors’ Report Directors’ The Savola Group Annual Report 2020 The Savola Group 72 OVERVIEW STRATEGIC REVIEW DIRECTORS’ REPORT FINANCIAL STATEMENTS 75
Regulator General Assembly 3rd Line 3rd Internal Audit (Institutionalization and oversight) Great independency Great Objectivity Audit work (financial, risk and other activities) • • • • Quality 2nd Line Financial Control Risk Management Board of Directors of Board Monitoring the necessary support Offering Authority definition Independence of the reports Compliance with rules and regulations and code of conduct Reports to regulators Corporate Governance and Compliance • • • • • • (vision, strategic planning, performance monitoring) Senior Management The companies’ committees (Audit, RNC, and Investment) 1st Line Management Controls Internal Control Measures Internal Control Committees Organizational structure Organizational Planning and making the right decisions Policies and procedures Execution Assessment • • • • • Subsidiaries, Boards and Subsidiaries, Boards Three lines of Defense Three for governance, monitoring, the Group accountability across Lines of Defense” model to ensure Savola operates a “Three environment. and management of risks, and the control reporting and senior wider governance The Board framework. within Savola’s Lines of Defense plays a distinct role Each of the Three the parties best positioned are Lines of Defense model, and they the primary stakeholders served by the Three management are processes. risk management and internal control in Savola’s reflected Lines of Defense are to help in ensuring that the Three
Established a dedicated risk management function at the Group and its main at the Group Established a dedicated risk management function team leading the risk subsidiaries. The function comprises a dedicated well as assigned risk champions management activities at enterprise level, as business units/ respective who implement risk management activities within functions. of Directors. by the Board approved governanceDeveloped a risk management framework and policy, management culture. its risk as part of promoting risk guide program Launched WAEI its subsidiaries. and the Group sessions across Conducted multiple risk awareness and its main subsidiaries functions at the Group Conducted a risk assessment for various key Savola Foods. units of its subsidiary, for key operating Embarked on a risk assessment project relative functions for assessment. external risks and communicated them with the identified emerging Proactively and enhance managing risk assessments A Governance, effectively Risk and Compliance (GRC) system has been implemented to and its main subsidiaries; management, and internal management issues, key risk indicators, policy audit at Savola Group registers, Savola Foods and Panda, autonomously. • Audit External In developing the ERM framework, the focus was to design a process that framework, the focus was to design a process In developing the ERM simple and pragmatic. Savola remaining business needs while Savola’s addresses in identifying, the series of activities that Savola will use ERM framework outlines is being that risk its risks. The framework ensures assessing and managing at Savola, which enable the flow set of processes a common managed through for making of risk information responsibility to the person with the authority and a the activity associated with the risk. By establishing decisions pertaining to be can risk management process set of tools, Savola’s common language and Group. at any level within the replicated and risk management culture to strengthen efforts In line with the continuous capabilities, Savola has: • • • • • • • • c) Channels to communicate, decline and enforce the risk culture c) Channels to communicate, decline and enforce - Balance Dec 2019 1,906,468 Balance 70,279 Dec 2020 According to the According of the requirements laws and applicable regulations Reasons/ Justifications 100,279 1,877,148 Oct-19 Date issued 3 years Loan period continued – – Income and withholding tax Employees‘ GOSI and social insurance Iqama renewal, exit and re-entry exit and re-entry Iqama renewal, visas permits and Iqama renewal Work License fees and other fees Description 664 477 7,060 8,647 23,458 49,299 12,838 end of the but not paid Due until the financial period Paid 91,038 74,327 47,889 35,843 130,612 129,725 130,169 Lender Saudi British Bank * Item (payments) Customs duties Zakat Income tax and withholding tax GOSI (for KSA) and social insurance (for outside KSA) Visas and passport office fees Labor office fees Other duties and government levies Borrowing company Borrowing Summary of payments made and due to theSummary of payments government (in SAR ‘000s) Savola Risk Management approach Potential risks to Savola Group Operations Potential risks to Savola Group Herfy Food Services Co. Herfy Food Services short-term loans Total No. No Savola has developed – in line with the market best practices – an integrated Enterprise Risk Management (ERM) framework to Savola has developed – in line with the market best practices – an integrated Enterprise that collaborative risk management environment a support the success of the business and achievement of its strategic goals through leading ERM practices and with current identifies, monitors and mitigates risks. The framework has been developed in line proactively ISO 31000. b) Enterprise Risk Management framework a) Risk Management overview activities in basic food of its commercial the nature by risks through may be affected like any other economic entity, The Group, operations being exposed of the Group and other investments. These risks may be summarized in the possibility commodities, retail in raw material prices, currencies, its operations outside the Kingdom, as well as fluctuations from to geopolitical risks that result also economic and are it operates. There the local and internationalspeculation and unfair price competition in markets where geographic in line with the Group’s and risks pertaining to new markets in the region, it operates political risks in the countries where expansion strategy. of the countries that the or other currencies exchange rates against the Saudi Riyal currency, Further risks include: fluctuation in foreign related to entering into new operates; risks the Group operates in and inflation in the economies of countries where Group the economic conditions and political situation in countries where investments; and risks that might be associated with the current operates or exports its products. Group companies and funds, locally and internationally. in different its various investment shareholdings faces other risks from The Group Management and Audit Committee, Executive of Directors, its Board and its subsidiaries manage these risks through The Group a sound risk is focused on continuously developing and improving The Group within the Group. various departments and task forces It has established a dedicated Risk Management department at holding level and its major the Group. management system across subsidiary i.e. SFC and Panda. and the value of its assets, and is committed to continually developing its risk its stakeholders, reputation Savola seeks to protect by way of its risk governance framework and continual team development. management culture 1. 2. 3. 4. 5. * Reclassified from long-term loans * Reclassified from 2–5) Main Activities and Financial Disclosures Disclosures Financial and Main Activities Directors’ Report Directors’ 6. 7. 3) 3–1) The Savola Group Annual Report 2020 The Savola Group 74 OVERVIEW STRATEGIC REVIEW DIRECTORS’ REPORT FINANCIAL STATEMENTS 77 dingly records dingly records oup monitors the proportion of equity securities in its oup monitors the proportion fecting all instruments traded in the market. The Group is The Group fecting all instruments traded in the market. esult of changes in market prices, whether those changes are caused changes are esult of changes in market prices, whether those Liquidity risk Fair value of assets and liabilities Market risk Price risk risk Credit f) commitments associated with financial Liquidity risk is the risk that an enterprise will encounter difficulty in raising funds to meet an inability to sell a financial asset quickly at an amount close to its fair value. Liquidity risk is from instruments. Liquidity risk may result facilities to meet any future committed credit available through basis that sufficient funds are managed by monitoring on a regular commitments. g) transaction between market to sell an asset or paid to transfer a liability in an orderly Fair value is the price that would be received has access in its absence, the most advantageous market to which the Group date in the principal or, participants at the measurement accounting policies and disclosures its non-performancenumber of the Group’s risk. A at that date. The fair value of a liability reflects of fair values, for both financial and non-financial assets and liabilities. For further details, the same item can the measurement require financial statements for 2020. in the clarification notes accompanying the Company’s be reviewed c) of changes in market prices. financial instrument will fluctuate because cash flows of a the fair value or future Market risk is the risk that price risk. risk and other rate risk, currency types of risk: interest three Market risk comprises rate risk c-1) Interest rates on the interest in the prevailing of fluctuations risks associated with the effect to various the exposures rate risks are Interest financial positions and cash flows. Group’s and are at floating rate of interest and short-term which are deposits, borrowings its rate risks arise mainly from interest The Group’s rates. monitors the changes in interest basis and for which the management closely on a regular subject to re-pricing risk c-2) Currency exchange rates for its will fluctuate due to changes in foreign risk is the risk that the value of a financial instrument Currency Iranian Riyals, Egyptian Pounds, United Arab Emirates Dirhams, Sudanese Pounds transactions principally in Saudi Riyals, US Dollars, investments in foreign exchange risk. The Group’s operates internationally and is exposed to foreign Lira. The Group and Turkish to mainly related are such exposures translation risk. Currently, exposed to currency are subsidiaries and associates, whose net assets Lira. against Iranian Riyals, Egyptian Pounds, Sudanese Pounds and Turkish currencies exchange rate movements between foreign Translation Reserve” in the accompanying Currency as a separate component of equity “Foreign recorded Such fluctuations are effect on the consolidated its management monitors such fluctuations and manages consolidated financial statements. The Group’s financial statements accordingly. that match the cash flows generated by the underlying operations of the Group. denominated in currencies are borrowings Generally, without an economic hedge This provides of the borrowings. currency is denominated in the on borrowings In addition, interest is not applied in these circumstances. hedge accounting into and therefore derivatives being entered d) will fluctuate as a r The risk that the value of a financial instrument or its issuer or factors af by factors specific to the individual instrument classified on the statement equities which are holds investment in certain listed the Group exposed to equity securities price risk since The management of the Gr of financial position as FVOCI investments. are managed on an individual basis and all buy and sell decisions Such investments are investment portfolio based on market indices. United Sugar Company uses derivative financial instruments (Commodity future by the Investment Committee. In addition, approved in the Sugar business. contracts) to hedge its price risk of raw material e) and cause the other party to incur a an obligation will fail to discharge risk is the risk that one party to a financial instrument Credit Group has an approval credit risk, the to reduce exposure To credit risk. has no significant concentration of financial loss. The Group the towards exposure monitors the credit applied to its customers. The management also regularly limits are credit whereby process an whether they are characteristics, payment history, to their credit according grouped the customers are customers whereby geographic location, existence of any financial/ their or manufacturers, a wholesale/retail whether they are individual or a legal entity, in which they operate and accor economic difficulties including the default risk associated with the industry and country In monitored. regularly are Outstanding customer receivables doubtful of recovery. impairment loss against those balances considered into insurance arrangements in certain geographies. has also entered debtors, the Group risk from to cater the credit order oup’s operating units. The most important types of risk operating oup’s continued oved by the Board of Directors. Senior management of Directors. oved by the Board oup’s risk management policies and procedures and reviews and reviews risk management policies and procedures oup’s continued continued Modern method to share the knowledge of already identified and known business-related risks. known business-related identified and the knowledge of already Modern to share method of or understand today. be aware those risks that Savola may not fully and identify explore Initiative to reflect, risks that Savola may face to assess potential the Group across and expertise from that brings together people Program in the future. the best and most cost-efficient ways on managing risks and to reflect Savola is currently how Opportunity to review sustainable basis. of managing risks on a Financial instruments and risk management Savola Risk Management approach approach Savola Risk Management • • • • – WAEI Management Culture Risk Promoting Risk management framework Financial Risk Management Identification of risks related to the pandemic and sharing them with the respective departments for processing. respective departments for related to the pandemic and sharing them with the Identification of risks with following up on them. along Contributing to risk mitigation plans and responses while holding a membership to the pandemic related Contributing to forming crisis management committees and taskforces to support and advise. of Directors the Board of the pandemic activities to reporting Periodic and frequent Potential risks to Savola Group Operations Potential Group risks to Savola • excellence and bolster internal enhance corporate controls, a risk management culture, to promote In its continuing efforts which is a: Savola has launched WAEI, the adequacy of the risk management framework in relation to the risks faced by the Group. the adequacy of the risk management framework in relation cash and cash equivalents, trade and other Financial instruments carried on the consolidated statement of financial position include lease liabilities, derivatives, accounts payable and accrued and other borrowings, investments, long term receivables, receivables, associated with each disclosed in the individual policy statements methods adopted are liabilities. The particular recognition current item. has a legally enforceable in the financial statements, when the Group and net amounts reported Financial asset and liability is offset the asset and liability simultaneously. amounts and intends either to settle on a net basis, or to realize the recognized right to set off identifies, evaluates and hedges financial risks in close co-operation with the Gr identifies, evaluates and hedges financial risks risk and liquidity risk. market risk, credit are framework. The risk management and oversight of the Group's for establishment has overall responsibility of Directors The Board policies. The team regularly risk management for developing and monitoring the Group’s executive management team is responsible the audit committee. through of Directors to the Board reported meets, and any changes and compliance issues are market conditions and the changes in by the executive management team to reflect regularly reviewed Risk management systems are aims to develop a disciplined and and procedures, its training and management standards through activities. The Group, Group’s and obligations. in which all employees understand their roles environment constructive control The audit committee oversees compliance by management with the Gr b) under policies appr Risk management is carried out by senior management The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value and cash flow interest rate risk, fair value and cash flow interest expose it to a variety of financial risks: market risk (including currency activities The Group’s of focuses on the unpredictability overall risk management program risk and liquidity risk. The Group’s risks and price risk), credit Group uses derivative financial performance. The on the Group’s adverse effects financial markets and seeks to minimize potential exposures. financial instruments to hedge certain risk 3–2) a) d) COVID-19 and Risk Management role d) COVID-19 and Risk it. Several risk arising from during the pandemic and the risks role had an effective The Risk Management department at the Group risk management framework. As subjective to evaluation as per the enterprise identified early on and were types had been proactively its execution and effectiveness. active monitoring by risk management to ensure a mitigation plan has been put in place with a result, mainly involved the following: risk management role In summary, • • • • 3–1) Main Activities and Financial Disclosures Disclosures Financial and Main Activities 3) Directors’ Report Directors’ The Savola Group Annual Report 2020 The Savola Group 76 OVERVIEW STRATEGIC REVIEW DIRECTORS’ REPORT FINANCIAL STATEMENTS 79 Listed Listed Listed Unlisted Unlisted Unlisted Limited Liability Limited Liability Limited Liability Limited Liability Legal entity (listed/ unlisted/ limited liability) Inside Inside Inside Inside Inside Inside Inside Inside Inside Inside Inside the Kingdom/ outside the Kingdom ms are, inside and outside the Kingdom, ms are, Saudi British Bank Nationals Industrialization Co. Middle East Paper Co. Joussour Holding Co. United Mining Industries Co. Al Oula Real Estate Development Co. Thabat Construction Co. Supplies Architectural Co. Works International Co. Timber Mayar Foods Co. Names of the companies in which the member of the Board or was a director of Directors board manager of its previous of directors Listed Listed Unlisted Unlisted Limited Liability Limited Liability Limited Liability Limited Liability Limited Liability Limited Liability Legal entity (listed/ unlisted/ limited liability) Inside Inside Inside Inside Inside Inside Inside Inside Inside Inside Inside the Kingdom/ outside the Kingdom Names of the companies in which of the member of the Board or manager is a director Directors of directors board of its current Savola Group Almarai Co. Abdulkadir Al Muhaidib & Sons Co. Rafal Real Estate Development Co. Al Muhaidib Holding Co. Essam Abdulkadir Al Muhaidib & Partners Co. Amwal Al Ajial Holding Company International Co. for and Energy Water Development (Acwa) Vision Invest Holding Co. Zat Al Sawary Co. Board member Board name Sulaiman Mr. Abdulkadir Al Muhaidib Names of the companies, whatever their legal forms are, inside and outside the Kingdom, which a Board member Names of the whatever their companies, inside and outside the legal forms Kingdom, which a Board are, or manager in: board or previous is a member of their current Summary of the role and responsibilities of the Board of Directors: of the Board and responsibilities Summary of the role No. 1. a) and members classification Composition of the Board a-1) with for managing the Company in accordance to shareholders authoritative body responsible is the highest of Directors The Board overall corporate strategies, plans, include setting of Directors of the Board The main roles regulations. its bylaws, laws and relevant corporate governance, ensuring measures, internal control establishing and reviewing of the Company, policies and main objectives financial approves The Board the Group. across of internal controls risks and ensuring the effectiveness mechanisms to manage proper the protects performance. The Board and Executive Management’s and monitors the performancebudgets, statements, of the Group the application, supervision and ensure policies that parties including approving relevant and other of its shareholders interests and its performance to the Company information and commits to disclose any key that related and regulations, execution of the laws in the bylaws which has been articulated of the Board, role its assets and liabilities. The detailed in evaluating may assist shareholders website (www.savola.com). and Corporate Governance Company’s Manual, is available on the a-2) and members classification: Composition of the Board which is in line with the to be 11 members, of Directors of the Board bylaws have set the number of members The Company’s was elected by the AGM held on the Board Companies’ Law and Corporate Governance Regulations issued by the CMA. Accordingly, term 30 June 2022. All the elected members are that started 1 July 2019 for the period of 3 years ending 8 May 2019 for the current refer to the qualifications, experience of the members and their classification please either Non-Executive or Independent (to review the beginning of this Report). a-3) names of the companies, whatever their legal for The below statement/schedule includes the board: or previous member is a member or manager of their current in which a Board CEOs Specialty Fats Other Companies Board of Directors Board Corporate Communication Co. CEO Baked Goods Board Secretary Board Knowledge Economic City of Trustees Board of Directors Board and (Savola CSR entity) Services Savola World Board Board Savola World Resources Resources Corporate CEO Board of Board Directors Kinan Co. Seafood Investment Committee Other Non-Consolidated Investments Legal Affairs Governance, Compliance and CEO Board of Board Directors Almarai Co. Assembly Group CEO Group Board of Directors Board Distribution Risk Shareholders General Shareholders Marketing and Management
CEO Board of Board Directors Al Kabeer Holding Co. Pasta Relations Audit Committee Renumeration and Investment and Investor Non-Consolidated Investments Nomination Committee CEO Board of Board Directors Herfy Co. Group Finance Group Sugar CEO Directors Panda Retail Co. Board of Co. Board Audit Internal Consolidated Business Units CEO Directors Edible Oil Directors’ Report Directors’ Organization structure: Organization Corporate Governance Report and Major Relevant Disclosures Relevant and Major Report Governance Corporate Co. Board of Co. Board Savola Foods The Savola Group Annual Report 2020 The Savola Group 78 OVERVIEW STRATEGIC REVIEW DIRECTORS’ REPORT FINANCIAL STATEMENTS 81 Limited Liability Unlisted Unlisted Limited Liability Listed Unlisted Listed Limited Liability Limited Liability Limited Liability Unlisted Unlisted Unlisted Unlisted Limited Liability Limited Liability Legal entity (listed/ unlisted/ limited liability) Inside Inside Inside Inside Inside Inside Outside Inside Inside Inside Inside Inside Inside Inside Inside Inside Inside the Kingdom/ outside the Kingdom Emaar Middle East Co. Trading Zohoor Alreef Co. Steel Al Yamamah Industries Co. Thabat Construction Co. Limited Middle East Paper Co. (MEPCO) Emdad Human & Manpower Resources Supply Co. Al Salam Bank Bahrain Nesaj Real Estate Development Co. Trading & Al Latifia Contracting Co. Amwal Al Khaleej for Investment Commercial Co. Albalad Al Amin Co. Rafal Real Estate Co. Al Oula for Real Estate Development Co. International Co. Timber Bloom Invest Co. Co. Saudi Tabreed Names of the companies in which the member of the Board or was a director of Directors board manager of its previous of directors Listed Listed Listed Unlisted Limited Liability Unlisted Unlisted Unlisted Limited Liability Unlisted Limited Liability Unlisted Unlisted Unlisted Limited Liability Limited Liability Unlisted Unlisted Unlisted Unlisted Unlisted Unlisted Unlisted Legal entity (listed/ unlisted/ limited liability) Inside Inside Inside Inside Inside Inside Inside Inside Inside Inside Inside Inside Inside Inside Inside Inside Inside the Kingdom/ outside the Kingdom Inside Inside Outside Outside Outside Outside Outside Savola Group Savola Group Herfy Food Services Co. Bawan Co. Abdulkadir Al Muhaidib & Sons Co. Shamia Real Estate Development Co. Rafal Real Estate Co. National Housing ”Al wataniyah Al eskan” Co. Panda Retail Co. Safenat Arabian Contracting Company Al Muhaidib Holding That Al Sawary Co. Romansiah Co. Limited Tharwa City for Real Estate Co. Vision Invest Holding Co. Nokhbat Alkwader Co. Jadeer Investment Holding Co. Names of the companies in which Names of the companies in which of the member of the Board or manager is a director Directors of directors board of its current Afia International Co. United Sugar Co. Afia International Co. Egypt United Sugar Co. Egypt Alexandria Sugar Co. Egypt El Maleka for Food Industries Co. Savola Gida Mr. Essam Mr. Abdulkadir Al Muhaidib Board member Board name 3. No. continued Listed Unlisted Unlisted Unlisted Unlisted Unlisted Legal entity (listed/ unlisted/ limited liability) Limited Liability Limited Liability Limited Liability Limited Liability Limited Liability Limited Liability Limited Liability Limited Liability Limited Liability Limited Liability Limited Liability Limited Liability Limited Liability Limited Liability Limited Liability with GCC capital Inside Inside Inside Inside Inside Inside Inside the Kingdom/ outside the Kingdom Inside Inside Inside Inside Inside Inside Inside Inside Inside Inside Inside Inside Inside Inside Inside Knowledge Economic City Co. Kinan International Real Estate Development Co. Al Aqeeq Real Estate Development Co. Sukoon International Savola Packaging Systems Co. Assila Investments Co. Al Muhaidib Land Transport Sulaiman Abdulkadir Al Muhaidib & Partners Co. Emad Abdulkadir Al Muhaidib & Partners Co. Abdulkadir Al Awatef Muhaidib & Partners Co. Maryam Abdulkadir Al Muhaidib & Partners Co. Abdulkadir Al Tamader Muhaidib & Partners Co. Haifa Abdulkadir Al Muhaidib & Partners Co. Loloah Sulaiman Almudaiheem & Partner Co. Muhail for Operation and Maintenance Co. United Feed Manufacturing Co. Amwal Al Khaleej for Investment Commercial Co. Mayar Transport & Mayar Transport Co. Warehousing Gulf Marasy for Marine Services Co. & Citadel Trading Contracting Co Al Muhaidib for Development Co. Names of the companies in which the member of the Board or was a director of Directors board manager of its previous of directors continued Listed Listed Listed Listed Unlisted Unlisted Limited Liability Limited Liability Limited Liability Limited Liability Legal entity (listed/ unlisted/ limited liability) Inside Inside Inside Inside Inside Inside Inside the Kingdom/ outside the Kingdom Inside Inside Inside Inside Savola Group Banque Saudi Fransi Dur Hospitality Almarai Co. Savola Foods Co. Panda Retail Co. Names of the companies in which Names of the companies in which of the member of the Board or manager is a director Directors of directors board of its current Taj Al Awfia Co. Al Awfia Taj Investment & Tarabot Development Al Shamiyah Urban Development Co. Ltd. Arabian Safenat for Construction Co. Mr. Bader Mr. Abdullah Al Issa Board member Board name Names of the companies, whatever their legal forms are, inside and outside the Kingdom, which a Board member theNames of their companies, whatever the inside and outside legal forms a Board Kingdom, which are, or manager in: board or previous is a member of their current 2. No. Corporate Governance Report and Major Relevant Disclosures Disclosures Relevant and Major Report Governance Corporate a-3) Directors’ Report Directors’ The Savola Group Annual Report 2020 The Savola Group 80 OVERVIEW STRATEGIC REVIEW DIRECTORS’ REPORT FINANCIAL STATEMENTS 83 Unlisted Listed Listed Listed Unlisted Unlisted Unlisted Unlisted Legal entity (listed/ unlisted/ limited liability) Inside Inside Inside Inside Inside Inside Inside Inside Inside the Kingdom/ outside the Kingdom Merrill Lynch Kingdom Merrill Lynch of Saudi Arabia Herfy Food Services Co. Agriculture Tabuk Development Co. National Medical Care Co. The Industrialization & Services Co. Energy Riyadh Hotels & Entertainment Co. Saudi Industries Development Co. Panda Retail Co. Names of the companies in which the member of the Board or was a director of Directors board manager of its previous of directors Listed Listed Listed Listed Listed Listed Unlisted Unlisted Unlisted Unlisted Unlisted Unlisted Unlisted Unlisted Limited Liability Limited Liability Limited Liability Listed Listed Unlisted Unlisted Legal entity (listed/ unlisted/ limited liability) Inside Inside Inside Inside Inside Outside Inside Inside Inside Outside Outside Outside Outside Outside Inside Inside Inside Inside Inside Inside Inside Inside the Kingdom/ outside the Kingdom Savola Group Herfy Food Services Co. Arabian Cement Co. Riyad Bank Etihad Etisalat (Mobily) & Ready Mix Concrete Construction Supplies Ltd. Savola Foods Co. United Sugar Co. Afia International Co. United Sugar Co. Egypt Alexandria Sugar Co. Egypt El Maleka for Food Industries Co. Qatrana Cement Co. Afia International Co. Egypt Saudi Industrial Construction & Ltd. Engineering Projects and Saudi Technology Co. Trade for Al Wusataa Development Names of the companies in which Names of the companies in which of the member of the Board or manager is a director Directors of directors board of its current Savola Group Alrajhi Bank Al Rajhi Capital Savola Foods Co. Eng. Mutaz Qusai Alazawi Board member Board name Abulaziz Mr. Khaled Al Ghufaily 5. No. 4. continued Legal entity (listed/ unlisted/ limited liability) Limited Liability Limited Liability Limited Liability Limited Liability Limited Liability Limited Liability Limited Liability Limited Liability Limited Liability Unlisted Limited Liability Unlisted Limited Liability Inside the Kingdom/ outside the Kingdom Inside Inside Inside Inside Inside Inside Inside Inside Inside Inside Inside Inside Inside Sulaiman Abdulkadir Al Sulaiman Abdulkadir Al Muhaidib & Partners Co. Emad Abdulkadir Al Muhaidib Co. Abdulkadir Al Awatf Muhaidib & Partners Co. Maryam Abdulkadir Al Muhaidib & Partners Co. Hayfa Abdulkadir Al Muhaidib Co. Lolwah Sulaiman Almudaiheem & Partners Himmah Logistics Co. Muhail for Operation and Maintenance Co. Abdulkadir Al Tamader Muhaidib Co. International Co.for and Energy Water Development (Acwa) Al Jadeer Logistics Services Masdar Building Materials Co. & Mayar Transport Co. Warehousing Names of the companies in which the member of the Board or was a director of Directors board manager of its previous of directors continued Limited Liability Limited Liability Limited Liability Limited Liability Limited Liability Limited Liability Limited Liability Limited Liability Limited Liability Limited Liability Limited Liability Limited Liability Limited Liability Limited Liability Unlisted Unlisted Limited Liability Limited Liability Legal entity (listed/ unlisted/ limited liability) Inside the Kingdom/ outside the Kingdom Inside Inside Inside Inside Inside Inside Inside Inside Inside Inside Inside Inside Inside Inside Inside Inside Inside Inside Names of the companies in which Names of the companies in which of the member of the Board or manager is a director Directors of directors board of its current Ekseer Alkhaleej Contracting Co. Buhairat Alkhobar Real Estate Development Co. Mayar Foods Co. Atheel Holding Co. Factory Co. Spring Water Ltd. Saudi Tharwa for Real Estate Investment & Development Co. Atheel Arabia for Services Co. Limited Amwal Al Ajyal Holding Co. & Qalaa Trading Contracting Co. Factory Co. Rivers Water Ltd. Essam Abdulkadir Al Muhaidib & Partners Co. Factory Co. Nestle Water Ltd. Co. Al Awfia Taj Factory Naqiah Water Limited Services Shaas for Water Co. Al Ahlam for Tanmiat Construction Services Al Manhal Water Factory Services Shaas for Water Co. Ltd. Board member Board name Names of the companies, whatever their legal forms are, inside and outside the Kingdom, which a Board member theNames of their companies, whatever the inside and outside legal forms a Board Kingdom, which are, or manager in: board or previous is a member of their current No. Corporate Governance Report and Major Relevant Disclosures Disclosures Relevant and Major Report Governance Corporate a-3) Directors’ Report Directors’ The Savola Group Annual Report 2020 The Savola Group 82 OVERVIEW STRATEGIC REVIEW DIRECTORS’ REPORT FINANCIAL STATEMENTS 85 Unlisted Unlisted Listed Listed Limited Liability Limited Liability Limited Liability Limited Liability Limited Liability Limited Liability Unlisted Limited Liability Legal entity (listed/ unlisted/ limited liability) Inside Inside Inside Inside Inside Inside Inside Inside Outside Inside Inside Inside Inside the Kingdom/ outside the Kingdom Sukoon Real Estate Al Aqeeq Real Estate Bank Albilad Al Soraie Industrial & Co. Trading Red Sea Markets Co. Ltd. Keppel Alnumu Co. Sedco Capital Abdulaziz Al Saghair Holding Co. Quantum Investment Bank International Co. for and Energy Water Development (ACWA) Ahmed Mohammed Saleh Baeshen & Co. ARCOMA Co. Names of the companies in which the member of the Board or was a director of Directors board manager of its previous of directors Listed Limited Liability Limited Liability Limited Liability Limited Liability Limited Liability Holding Co. Listed Unlisted Unlisted Listed Listed Unlisted Joint venture for the Saudi Ministry of Finance Limited Liability Entity Gov. Non-profit Organization Legal entity (listed/ unlisted/ limited liability) Inside Inside Inside Inside Inside Inside Inside Inside Inside Inside Inside Inside Inside Outside Inside Inside Inside Inside the Kingdom/ outside the Kingdom Savola Group Alfadl Group Sahara Building Contractors Co. Rabya Co. Alfadl Investments Co. Alfadl Real Estate Co. Co. Group Al Takamul Names of the companies in which Names of the companies in which of the member of the Board or manager is a director Directors of directors board of its current Savola Group Kinan International for Real Estate Development Co. Assila Investments Co. Savola Group Alinma Bank Diyar Al Khayyal Real Estate Development Co. Saudi Bank Tunisian Al Rabie Saudi Foods Co. Ltd. Fund Environment Foundation Savola World Mr. Rakan Mr. Abdulaziz Al Fadl Board member Board name Mohammed Mr. Ibrahim Al Issa Mr. Abdulrahman Mr. Mohammed Ramzi Addas 8. 9. No. 7. continued Listed Unlisted Unlisted Limited Liability Limited Liability Limited Liability Legal entity (listed/ unlisted/ limited liability) Gov. Gov. Corporation Inside Inside Inside Inside Inside Inside Inside Inside the Kingdom/ outside the Kingdom Albilad Bank Abdullatif Al Issa Holding Group Naqel Co. Al Rajhi Alpha Investment Holding Co. Raj Real Estate Co. National General Automotive Co. Saudi Post Names of the companies in which the member of the Board or was a director of Directors board manager of its previous of directors continued Listed Listed Listed Listed Listed Unlisted Unlisted Unlisted Unlisted Unlisted Unlisted Unlisted Unlisted Limited Liability Limited Liability Limited Liability Limited Liability Limited Liability Professional Co. Professional entity Non-profit Organization Legal entity (listed/ unlisted/ limited liability) Inside Inside Inside Inside Inside Inside Inside Inside Inside Inside Inside Outside Inside Inside Inside Inside Inside Inside Inside Inside Inside Inside the Kingdom/ outside the Kingdom Names of the companies in which Names of the companies in which of the member of the Board or manager is a director Directors of directors board of its current Savola Group Jarir Marketing Co. Dur Hospitality Dallah Health Al Riyadh Development Co. Fahad Bin Abdullah Al & Kassim & Sons Trading Investment Co. Saudi Heritage Hospitality Co. Mohammed Rashid Al Dr. Fagih & Associates Rakeen Najd International Co. Al Rajhi United Investment Holding Co. Co. Projects Alargan Fincorp Investment Holding Co. Mohammed Abdulaziz Al Habib & Sons Holding Co. Baseqat Al Khaleej Co. Commercial Areez Investment Co. Ltd. Abdullah Ibrahim Al Subeaei Holding (AIMS) Al Kassim Fund for Investment and Development Commercial Amwal Financial Consultations Century 21 & Partner for Real Estate Appraisal Co. Fahad Abdullah Al Kassim Auditing Office Foundation Savola World Board member Board name Fahad Mr. Abdullah Al Kassim Names of the companies, whatever their legal forms are, inside and outside the Kingdom, which a Board member theNames of their companies, whatever the inside and outside legal forms a Board Kingdom, which are, or manager in: board or previous is a member of their current No. 6. Corporate Governance Report and Major Relevant Disclosures Disclosures Relevant and Major Report Governance Corporate a-3) Directors’ Report Directors’ The Savola Group Annual Report 2020 The Savola Group 84 OVERVIEW STRATEGIC REVIEW DIRECTORS’ REPORT FINANCIAL STATEMENTS 87 No. of attendance 5 of 5 5 of 5 5 of 5 5 of 5 5 of 5 5 of 5 5 of 5 5 of 5 5 of 5 5 of 5 5 of 5 5 of 5 1 of 1 1 of 1 1 of 1 1 of 1 No. of meetings attended √ √ √ √ √ √ √ √ √ √ √ √ Experience 20 Dec √ √ √ √ EGM No. 32 (29 April 2020) √ √ √ √ √ √ √ √ √ √ √ √ 28 Oct ecords above reflects the attendance of above reflects ecords Qualifications √ √ √ √ √ √ √ √ √ √ √ √ 16 Sep* Meetings during 2020 √ √ √ √ √ √ √ √ √ √ √ √ 29 April were mentioned earlier in this Report mentioned earlier in this were Previous positions Previous Chairman Vice Chairman Member Member Position √ √ √ √ √ √ √ √ √ √ √ √ 29 Jan Their current and previous positions, qualifications and experience positions, and previous Their current Current positions Current Board Member Board Sulaiman Abdulkadir Al Muhaidib Mr. Bader Abdullah Al Issa Mr. Abdulaziz Khaled Al Ghufaily Mr. Essam Abdulkadir Al Muhaidib Mr. Member Mr. Sulaiman Abdulkadir Al Muhaidib Mr. Bader Abdullah Al Issa Mr. Essam Abdulkadir Al Muhaidib Mr. Abdulaziz Khaled Al Ghufaily Mr. Eng. Mutaz Qusai Alazawi Fahad Abdullah Al Kassim Mr. Mohammed Ibrahim Al Issa Mr. Abdulrahman Mohammed Mr. Ramzi Addas Rakan Abdulaziz Al Fadl Mr. Adnan Abdulfattah Soufi Dr. Bader Hamad Al Rabiah Mr. Secretary) Elnour Ali Saad (Board Mr. Board members attendance record for the General Assembly meeting: members attendance record Board Board meetings attendance record: Board Member name Eng. Mutaz Qusai Alazawi Mr. Abdulaziz Khaled Al Abdulaziz Mr. Ghufaily Abdullah Al Fahad Mr. Kassim Abdulfattah Adnan Dr. Soufi Mohammed Mr. Ibrahim Al Issa 2. 3. 4. * The financial results for Q2 2020 were approved by the BOD by circulation based on the Audit Committee recommendation at its meeting held on based on the Audit Committee by the BOD by circulation approved results for Q2 2020 were * The financial 12 August 2020. No. 1. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. - r The last meeting of the General Assembly was held on 29 April 2020 and the attendance after the General Assembly. and members during the full year before the Board No. a–6) to limit measures General Assembly was held virtually during the last fiscal year due to the precautionary One meeting of the Shareholders during the meeting: present of Directors (COVID-19). The following is a list of the members of the Board of Coronavirus the spread Investment Committee members: Investment Committee 1. a–5) to limit measures and due to the precautionary held 5 meetings during the year, the Board and responsibilities, to enhance its role In order 2020. The below schedule shows the attendance records held virtually after March (COVID-19), all meetings were of Coronavirus the spread for each meeting during 2020: 2. 3. 4. 5. continued Listed Listed Unlisted Limited Liability Legal entity (listed/ unlisted/ limited liability) Inside Inside Inside Inside Inside the Kingdom/ outside the Kingdom Experience Has wide and independent experience as a leadership and his professional, focus is on making and C-level Boards leadership more Advisor to effective. Chairmen, Family Heads and CEOs. Qualifications MSc, Busines Economics, Erasmus University Rotterdam, The Netherlands; MA, and MA, Business Law, Erasmus Private Law, University Rotterdam, The Netherlands; Certified Professional Hawkamah/ Director, Mudara Institute of Directors Bupa Arabia Co. Arabian Cement Co. SEDCO Holding Group Holding Co. Awj Names of the companies in which the member of the Board or was a director of Directors board manager of its previous of directors continued Listed Listed Listed Listed Listed Unlisted Unlisted Listed Listed Unlisted Unlisted Unlisted Listed Legal entity (listed/ unlisted/ limited liability) were mentioned earlier in this Report were Previous positions Previous Senior Partner and Consultant, Egon Zehnder (1995‑2016); PCI PepsiCo, Director Management Institute (1993-1995) Inside Outside Outside Outside Outside Outside Outside Inside Inside Inside Inside Inside Inside Inside the Kingdom/ outside the Kingdom Their current and previous positions, qualifications and experience and previous Their current Current positions Current Managing Director/ Johan Brand Owner, Leadership Advisory (2016-present) DWC-LLC Savola Group Al Manar Financing and Leasing Co. Noor Financial Investment Co. Production Palms Agro Co. Meezan Bank Al Durra National Real Estate Co. Noor Al Salhiya Real Estate Co. Names of the companies in which Names of the companies in which of the member of the Board or manager is a director Directors of directors board of its current Savola Group Co. Fitaihi Group Alahli Capital Co. Jeddah Co. Wadi Panda Retail Co. Saudi Company for Industrial Services Mr. Bader Mr. Hamad Al Rabiah Board member Board name Adnan Dr. Abdulfattah Soufi Names of the companies, whatever their legal forms are, inside and outside the Kingdom, which a Board member theNames of their companies, whatever the inside and outside legal forms a Board Kingdom, which are, or manager in: board or previous is a member of their current Summary of Committee members’ CVs: Member name Mr. Rakan Abdulaziz Mr. Al Fadl Mr. Bader Abdullah Al Issa Mr. Essam Abdulkadir Al Mr. Muhaidib Abdulrahman Mr. Mohammed Ramzi Addas Johan Brand Mr. 11. No. 10. a-4) Remuneration and Nomination Committee members: 1. Corporate Governance Report and Major Relevant Disclosures Disclosures Relevant and Major Report Governance Corporate a-3) Directors’ Report Report Directors’ Directors’ 2. 3. 4. 5. The Savola Group Annual Report 2020 The Savola Group 86 OVERVIEW STRATEGIC REVIEW DIRECTORS’ REPORT FINANCIAL STATEMENTS 89 Total 3 of 3 3 of 3 3 of 3 3 of 3 3 of 3 3 of 3 √ √ √ √ √ √ 15 Sep √ √ √ √ √ √ 28 April Meetings during 2020 √ √ √ √ √ √ 28 Jan Mr. Morhaf Mohammed Alsamman Morhaf Mohammed Alsamman Mr. (Committee Secretary) Mr. Johan Brand Mr. (Independent external member) Mr. Abdulrahman Mohammed Ramzi Addas Abdulrahman Mohammed Mr. member) (Independent Savola Board Mr. Bader Abdullah Bader Al Issa Mr. member) Board (Non-Executive Savola Mr. Essam Abdulkadir Essam Al Muhaidib Mr. member) Board (Non-Executive Savola Member Mr. Rakan Abdulaziz Al Fadl Rakan (Chairman) Mr. member) (Independent Savola Board Investment Committee: Meetings and role of the Committee: Meetings and role members. The Board Non-Executive and Independent members, all of them are The Investment Committee consists of 5 the strategic plans in following and implementing of the Board to enhance the role Committee held 7 meetings during 2020 (COVID-19) of Coronavirus to limit the spread measures to investment opportunities. Due to the precautionary in relation responsibilities, role, Below is a summary of the Committee’s held virtually. 2020 were all meetings held after March held during 2020: membership, and the number of meetings duties and main responsibilities: Summary of Committee role, allocation framework and implementation model for an overall capital for its approval to the Board Review and recommend and factors such as return on invested capital targets activities, which takes into account relevant investment the Company’s its for Board the to recommend and Review objectives. strategic and limits risks limits, and guidelines allocation benchmarks, existing with the Company’s all in accordance or divestitures investment opportunities, acquisitions, joint ventures approval the balance sheet impact of specific In addition, to review by the Board. approved delegation of authority matrices that are ratios as part of liquidity and debt on the Company’s and the impact transactions including funding requirements proposed for approval. them to the Board determining whether to recommend to the Committee Charter on Savola’s of the Committee, please refer and responsibilities details about the role For more website (www.savola.com). - 5. 4. 3. 2. No. 1. Statement of attendance for Committee meetings held during 2020: b–2) • • continued 1 of 1 1 of 1 1 of 1 1 of 1 1 of 1 1 of 1 1 of 1 No. of meetings attended √ √ √ √ √ √ √ EGM No. 32 (29 April 2020) egulation issued by CMA. e Independent and Non-Executive Board e Independent and Non-Executive Board continued Member and Chairman of IC Member Member Member and Chairman of RNC Member Member Member and Chairman of AC Position Mr. Mohammed Ibrahim Al Issa Mohammed Mr. Mohammed Ramzi Addas Abdulrahman Mr. Abdulaziz Al Fadl Rakan Mr. Abdulfattah Soufi Adnan Dr. Bader Hamad Al Rabiah Mr. Eng. Mutaz Qusai Alazawi Board Member Board Abdullah Al Kassim Fahad Mr. Remuneration and Nomination Committee: Board members attendance record for the meeting General Assembly members attendance record Board With regards to Nomination: With regards Board Committees: Board With regards to Remuneration: With regards Meetings and role of the Committee: Meetings and role duties and main responsibilities: Summary of Committee role, The Committee shall assume responsibilities related to 3 areas, namely Remuneration, Nomination and Corporate Governance, namely Remuneration, Nomination and and to 3 areas, related The Committee shall assume responsibilities include: duties and responsibilities about its activities. The Committee’s regularly will update the Board The Remuneration and Nomination Committee (RNC) consists of 5 members who ar The Remuneration and Nomination Committee members and external experts with experience in the field of the Committee’s mandates. The Committee held 3 meetings during members and external experts with experience in the field of the Committee’s 2020 were March (COVID-19) all meetings held after of Coronavirus spread to limit the measures 2020, and due to the precautionary remuneration, nominations in the field of During its meetings the RNC followed up its responsibilities held via video conference. statement of its membership and attendance of the Committee, and Corporate Governance. A summary of the main responsibilities as follows: during the year are 7. 8. 9. 10. 11. 6. 5. No. c) With regards to Corporate Governance (CG): c) With regards CG Manual and policies, and issued by CMA and the Company’s that the Company is in compliance with CG regulation Ensure and develop a code of and best practices; as well as review update CG Manual and rules pursuant to statutory requirements review; to fulfill the Company’s in order values and other internal policies and procedures the Company’s conduct representing professional in corporate governance members of the developments and comply with best practices; Regularly inform the Board requirements, and best practices, as well as all the competences stipulated in Article (94) of the CG r website to the Committee Charter on Savola’s of the Committee, please refer and responsibilities details about the role For more (www.savola.com). b) in its representatives membership, Executive Management and Savola’s for Board Recommend clear policies and standards annually and and Executive Management membership of the Board suitable for the requirements subsidiaries and associates, review of necessary solutions in the best interests and weaknesses and recommend in termsassess the performance of strengths of the Board if a and the absence of any conflicts of interest on an annual basis, the independence of independent directors Ensure the Company. another company. of member also acts as a member of the board Board Prepare a clear remuneration policy for Board members, its Committees and the Executive Management and clarify the relationship the relationship members, its Committees and the Executive Management and clarify policy for Board a clear remuneration Prepare In that policy. policy and highlight any material deviation from and the adopted remuneration between the paid remuneration in achieving its objectives. policy periodically and assess its effectiveness the remuneration addition, review • a) • b–1) b) Corporate Governance Report and Major Relevant Disclosures Disclosures Relevant and Major Report Governance Corporate a–6) Directors’ Report Directors’ The Savola Group Annual Report 2020 The Savola Group 88 OVERVIEW STRATEGIC REVIEW DIRECTORS’ REPORT FINANCIAL STATEMENTS 91 d to be achieved during the financial year. General standards for Remuneration: General standards and Committees: Summary of the Remuneration Policy of the Board Take into consideration the sector in which Savola operates, its size and experience of its Board members. consideration the sector in which Savola operates, its size and experience of its Board into Take members. and experienced board retain highly-qualified sufficient to attract and Be reasonably experience, expertise, duties he/she member’s the Board members may vary depending on Board of different The remuneration meetings he/she attended in addition to other considerations. of Board undertakes and independence and number was based on inaccurate informationdetermined shall be suspended if it has been that such remuneration The remuneration or the Executive Management. by a member of the Board provided members, Executive Management and employees; to Board to grant some of its shares If the Company developed a program in light of the Company’s this program the RNC shall supervise by the Company, purchased whether it is a new issue or shares CMA laws and regulations. bylaws and the relevant Be proportionate to Savola’s activities and the required skills for its management. and the required activities to Savola’s Be proportionate shall be linked to the long-term performance.The variable part of the remuneration and level of risks faced by Savola. the magnitude, nature objectives, Remuneration shall be consistent with the strategy, companies. The disadvantages of such practices of other the remuneration Benchmarking shall be used to take into consideration be avoided. remuneration and compensation shall in increases comparisons that might lead to unjustifiable to new appointments. with the RNC with respect in coordination Shall be prepared practical experience, skills and educational qualifications, and responsibilities, Remuneration shall be based on job level, duties level of performance. or borne by the Board activities carried out and responsibilities or Committee members’ to the Board Be fair and proportionate set out by the Boar Committee members, in addition to the objectives Remuneration of the Board, Committee members and Executive Management Remuneration of the Board, The remuneration of Savola Board members may consist of: a specified sum; an attendance fee; allowance; other in-kind benefits; members may consist of: a specified sum; an attendance fee; allowance; of Savola Board The remuneration remuneration of a of these benefits. In no event, shall the of 2 or more or a combination of the net profits; a certain percentage of the various Board The remuneration Law and CMA regulations. member exceed the limit stated in the Companies Board The policy stipulated that the annual by the GA. by the RNC and approved members may vary in light of the policy recommended member shall be SAR 200,000 and an attendance fee of SAR 5,000 for the session, as well as the other of the Board remuneration activity. to the Board expenses related it realized by Savola, nor shall that are of the profits members shall not be a percentage of Independent Board The remuneration profitability. on Savola’s or indirectly be based directly attendance – excluding the Audit Committee remuneration, remuneration shall determine its Committee’s The Board and approve recommendation. fees and other benefits based on the RNC of SAR 100,000 and attendance fees of SAR 5,000 for shall consist of an annual remuneration Committee member remuneration policy. the session, in line with the approved as recommendation shall be determined by the General Assembly based on the Board’s Audit Committee members’ remuneration to be SAR 150,000 and attendance fees of SAR 5,000 for the session, in line with the which was approved per the regulations, policy. approved that any time to time by the RNC, provided from and Committees shall be reviewed policy of the Board The remuneration to the General Assembly in the next meeting for approval. by the Board presented changes are recommended 8. 9. 10. 11. 12. d) d–1) Committees and of Directors, Policy of the Board the Remuneration 2 November 2017 approved AGM held on The shareholders’ Management Executive the and Committees Directors, of Board the of remuneration the regulates policy This Management. Executive CMA Corporate Governance of paragraph (1) of Article (61) of the Regulation. provisions to meet the of Savola Group the of the remuneration to the Board include recommending Nomination Committee (RNC) responsibilities The Remuneration and criteria, as follows: the approved with Executive Management in accordance its Committees and the Board, 1. 2. 3. 4. 5. 6. 7. d–2) • • • • • • Total 7 of 7 7 of 7 7 of 7 7 of 7 7 of 7 7 of 7 continued √ √ √ √ √ √ 9 Dec √ √ √ √ √ √ 15 Sept √ √ √ √ √ √ 31 Aug es to assess the effectiveness es to assess the effectiveness √ √ √ √ √ √ 28 June Meetings during 2020 √ √ √ √ √ √ 28 April √ √ √ √ √ √ 11 March √ √ √ √ √ √ 28 Jan continued Eng. Mutaz Qusai Alazawi (Chairman) Eng. Mutaz Qusai Alazawi member) Board (Non-Executive Savola Member Mr. Abdulaziz Khaled Al Ghufaily Abdulaziz Mr. member) Board (Non-Executive Savola Mr. Fahad Abdullah Fahad Al-Kassim Mr. member) (Independent Savola Board Dr. Adnan Abdulfattah Soufi Dr. member) (Non-Executive Savola Board Mr. Mohammed Ibrahim Al Issa Mr. member) (Non-Executive Savola Board Mr. Elnour Ali Saad Mr. (Committee Secretary) Board Committees Board of the Board and Committees’ performance during 2020 and to identify the strengths and weaknesses of the Board and and weaknesses of the Board and Committees’ performance during 2020 and to identify the strengths of the Board analyzed were With results and responsibilities. the questionnaires’ 100% participation rate, Committees in light of their role relevant and weaknesses and the and Committees including the strengths with the Board shared were and recommendations was a plan to conduct a workshop during 2020, among its agenda to arrange for a special session to train Board action plan. There but it was postponed due to the COVID-19 pandemic restrictions. members in light of the outcome of the evaluation process, and Committees meetings of the discussions and decision-making during the Board The periodic evaluation of the effectiveness (BME surveys) will continue for the year 2021. by an external and independent and Committees’ effectiveness evaluation of the Board Savola plans to conduct a comprehensive party during 2021. third Savola engaged Governance Compass, an external party to the Group. and independent consulting firm which is a non-related effectiveness assessment. The assessment Governance and leadership consulting firm Compass is a qualified in Board specialized throughout Committees and their meetings performed Directors, the performance by Governance of the Board, Compass covered applied during 2019 and 2020. this assessment were from resulted 2018. All recommendations surveys to assess the effectiveness (BME) Meeting Effectiveness Governance in 2020 to conduct Board Compass was also engaged during the meetings to reach and Committees meetings members’ participation and interaction in the discussions of the Board performance 2020, and the and ability to achieve its objectives continued during informed decisions that enhance the Company’s the and an action plan has been developed to address with the Board shared were continued assessment results which is being implemented. recommendations, the RNC supervision, as per and Committees evaluation for the year 2020 under Savola conducted an in-house annual Board article (41) of the CG Regulations issued by CMA. The evaluation included detailed questionnair Assessment of the Board of Directors, Committees and members performance: of Directors, Assessment of the Board Statement of attendance for Committee meetings held during 2020: 1. No. 2. 3. 4. 5. – • Corporate Governance Report and Major Relevant Disclosures Disclosures Relevant and Major Report Governance Corporate b) Directors’ Report Directors’ - - - - c) and and weaknesses of the Board 2009 aiming to identify the strengths since reviews effectiveness Savola has been conducting Board In line with this practice, and under the RNC of the Company. in the best interest solutions Committees, with a view to propose in this regard: supervision, Savola adapted the following methods - The Savola Group Annual Report 2020 The Savola Group 90 OVERVIEW STRATEGIC REVIEW DIRECTORS’ REPORT FINANCIAL STATEMENTS
93
56,481 2,800,000 – – – – – – 2,800,000 – – – 325,000 275,000 2,200,000 Total
Ibrahim Al Issa Al Ibrahim
5,435 290,000 – – – – – – – 290,000 – – – 65,000 25,000 200,000 Member Mohammed Mr. 11.
16,740 260,000 – – – – – – – 260,000 – – – 35,000 25,000 200,000 Member Alazawi Qusai Mutaz Eng. 10.
Soufi Soufi
- 260,000 – – – – – – – 260,000 – – – 35,000 25,000 200,000 Member Dr. Adnan Abdulfattah Abdulfattah Adnan Dr. 9.
Al Ghufaily Al
5,435 260,000 – – – – – – – 260,000 – – – 35,000 25,000 200,000 Member Khaled Abdulaziz Mr. 8.
Al Muhaidib Al
6,536 240,000 – – – – – – – 240,000 – – – 15,000 25,000 200,000 Member Abdulkadir Essam Mr. 7.
5,435 240,000 – – – – – – – 240,000 – – – 15,000 25,000 200,000 V-Chairman Issa Al Abdullah Bader Mr. 6.
of any Committee) any of
Muhaidib (Not a member member a (Not Muhaidib
Mr. Sulaiman Abdulkadir Al Al Abdulkadir Sulaiman Mr. 5. 5,435 225,000 – – – – – – – 225,000 – – – N/A 25,000 200,000 Chairman
Second: Non-Executive Directors: Non-Executive Second:
Fadl
- 240,000 – – – – – – – 240,000 – – – 15,000 25,000 200,000 Member Mr. Rakan Abdulaziz Al Al Abdulaziz Rakan Mr. 4.
Mohammed Ramzi Addas Ramzi Mohammed
- 240,000 – – – – – – – 240,000 – – – 15,000 25,000 200,000 Member Abdulrahman Mr. 3.
Al Kassim Al
5,435 290,000 – – – – – – – 290,000 – – – 65,000 25,000 200,000 Member Abdullah Fahad Mr. 2.
Al Rabiah Al
6,030 255,000 – – – – – – – 255,000 – – – 30,000 25,000 200,000 Member Hamad Bader Mr. 1.
First: Independent Directors: Independent First:
Title name Member No. Total work Total plans plans of the award Periodic member amount Specific Granted meetings Amount incentive incentive Managing Chairman, the value) Allowance Director or Director Long-term Expenses Expenses Committee the profits Short-term allowance consultative Aggregate Aggregate for technical, for attending for attending Secretary, if a Secretary, shares (insert shares remunerations
Remunerations Remunerations Percentage of Percentage Total allowance Total managerial and
In-kind benefits Board meetings Board
End of service
Variable remunerations Variable Fixed remunerations Fixed
Below are the details of Board members’ remunerations remunerations members’ Board of details the are Below (SAR):
Remuneration of the Board Members Board the of Remuneration d–4)
Corporate Governance Report and major relevant disclosures disclosures relevant major and Report Governance Corporate continued continued continued Summary of the Remuneration Policy of the Executive Management: Remuneration of the Board, Committee and Executive members Management Remuneration of the Board, thly basis at the end of each Gregorian month). each Gregorian on a monthly basis at the end of Basic salary (to be paid fees and phone allowances. education/school children’s not limited to, housing, transportation, but are Allowances that include, members. Management and eligible family for all employees and Executive Medical insurance benefits events of partial or permanentLife insurance policy (including disability and natural or unnatural death). KPIs/SMARTAnnual bonus based on annual appraisal evaluation. associated with individual performanceShort-term and long-term incentive plans linked with extraordinary/exceptional incentive plans such as stock option (whenever it exists). programs leave, annual air tickets, executive airport services and end of service benefits not limited to, annual Other benefits include, but are Company. to labor law and HR policies adopted by the according the RNC. by and general guidelines shall be approved compensation plans, programs Executive Management team’s and employees and Executive Management in light of the plans, programs policy for all The CEO implements the remuneration by the RNC. general guidelines approved • • • • • • • • please Committees and the Executive Management of Savola Group, details about the Remuneration Policy for the Board, For more website (www.savola.com). to the polices on Savola’s refer d–3) on a all employees and Executive Management, salary scale and the incentive scheme for the and approve The RNC shall review which includes: remuneration Management’s and the Executive recommendations basis, based on the management regular • Corporate Governance Report and Major Relevant Disclosures Disclosures Relevant and Major Report Governance Corporate d) Directors’ Report Directors’ The Savola Group Annual Report 2020 The Savola Group 92 OVERVIEW STRATEGIC REVIEW DIRECTORS’ REPORT FINANCIAL STATEMENTS 95
- - - – 70 480 319 N/A 4,794 9,880 1,742 13,699 18,973 10,199 30,984 CFO (SAR ‘000s) Expenses allowance Senior executives’ (5 in total) Board remuneration table remuneration Board Mentioned in the previous Mentioned in the previous compensation including the CEO and the Total 135,000 135,000 675,000 fees 35,000 35,000 meeting) (5,000 per 175,000 Attendance Fixed Board Board meetings) (excluding 100,000 500,000 for attending remuneration remuneration the allowance 100,000 Member Member Title Dr. Adnan Abdulfattah Soufi Adnan Dr. member) Board (Non-Executive, Savola Committee / member name Ibrahim Al Issa Mohammed Mr. member) Board (Non-Executive, Savola In-kind benefits Periodic remuneration Long-term incentive plans Salaries health insurance, education allowance, etc.) Allowances (including housing, transportation, Profits Short-term bonus for 2020) incentive plans (including performance-related The value of the Granted shares End of service award executives, if any for Board remuneration Total Description Senior executives’ compensation of Savola Group for 2020: Senior executives’ compensation of Savola Group during 2020 were: executives including the CEO and CFO of the Group Compensation and benefits paid to 5 senior Total 5. – fixed remuneration of Total Remuneration Variable - – No. 4. No. Fixed Remuneration – – – – – Grand total Total of variable remuneration Total – – The Group has complied with the disclosure of the components of the senior executives’ remuneration on aggregate in on aggregate of the components of the senior executives’ remuneration has complied with the disclosure Clarification: The Group of subparagraph (b) of paragraph (4) of Article 93 of the Corporate Governance Regulations issued by line with the requirements and employees, and to avoid any damage that may occur as a its shareholders of the Company, the interests CMA, but to protect by position, the Company did not disclose the details as per of disclosing the detailed senior executives’ remuneration result Appendix (1) of the CG Regulations. d–6) - N/A N/A N/A 3,000 2,435 3,000 2,435 continued Expenses allowance Board remuneration table remuneration Board table remuneration Board table remuneration Board Board remuneration table remuneration Board table remuneration Board Board remuneration table remuneration Board table remuneration Board table remuneration Board Mentioned in the previous Mentioned in the previous Mentioned in the previous Mentioned in the previous Mentioned in the previous Mentioned in the previous Mentioned in the previous Mentioned in the previous Mentioned in the previous Mentioned in the previous Mentioned in the previous Total 65,000 40,462 135,000 135,000 135,000 115,000 115,000 115,000 115,000 115,000 180,000 180,000 180,000 180,000 575,000 825,462 fees 5,000 35,000 35,000 35,000 15,000 15,000 15,000 15,000 15,000 15,000 30,000 30,000 30,000 30,000 meeting) 75,000 (5,000 per 140,000 Attendance Fixed Board Board 50,000 35,462 meetings) 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 (excluding 150,000 150,000 150,000 150,000 500,000 685,462 for attending remuneration remuneration the allowance Chairman Member Member Member Member Member Member Chairman Member of as (resigned 1 May 2020) Member (as of 6 October 2020) Chairman Member Member Member Title Eng. Mutaz Qusai Alazawi (Non-Executive, Savola Board member) Abdulaziz Khaled Al Ghufaily Mr. (Non-Executive, Savola Board member) Fahad Abdullah Al Kassim Mr. member) (Independent, Savola Board Mr. Johan Brand Mr. (Independent, external member) Mr. Essam Abdulkadir Al Muhaidib Mr. (Non-Executive, Savola Board member) Abdulrahman Mohammed Mr. Ramzi Addas member) (Independent, Savola Board Mr. Bader Abdullah Al Issa Mr. (Non-Executive, Savola Board member) Mr. Rakan Abdulaziz Al Fadl Mr. member) (Independent, Savola Board Dr. Ammr Khalid Kurdi Dr. (Independent, external member) Mr. Tareq Abdullah Al Garaawy Tareq Mr. Committee / member name Abdullah Al Kassim Fahad Mr. member) Board (Independent, Savola Mohammed Ibrahim Al Issa Mr. (Non-Executive, Savola Board member) Bader Hamad Al Rabiah Mr. member) (Independent, Savola Board Abdul Raouf Suliman Banaja Dr. (Independent, external member) Investment Committee Members: 1. 2. 3. Total 5. 3. 4. 2. Remuneration and Nomination Committee Members: 1. Total Ex-Committee Member: - 5. Audit Committee Members: 1. No. 2. 3. 4. Below are the details of Committees members’ remunerations (SAR): the details of Committees members’ remunerations Below are Corporate Governance Report and Major Relevant Disclosures Disclosures Relevant and Major Report Governance Corporate d-5) Remuneration of Committee members: Directors’ Report Directors’ The Savola Group Annual Report 2020 The Savola Group 94 OVERVIEW STRATEGIC REVIEW DIRECTORS’ REPORT FINANCIAL STATEMENTS 97
0% 0% 0% 0% 0% 0% 0% of change of change Percentage Percentage Percentage – – – – – – – Net change Net change
– – – – – – – Debt Debt instruments instruments – – – – 64 End of theyear End of the year Shares Shares 1,960 1,400
– – – – – – – Debt Debt instruments instruments – – – – 64 Shares Shares 1,960 1,400 Board members and their relatives: Board members and their relatives: Board Beginning of the year Beginning of the year
Mr. Elnour Ali Saad Elnour Mr. Corporate (Executive Director Board and GovernanceAffairs Legal & Secretary) Essam Abdulkadir Al Muhaidib Mr. Names of members whom the interest, Names of members whom the interest, contractual securities or rights issue belongs to Names of members whom the interest, contractual securities or rights issue belongs to Mr. Morhaf Mohammed Alsamman Morhaf Mr. Resources Human (Executive Director & Corporate Services) Eng. Mutaz Qusai Alazawi Eng. Anees Ahmed Moumina resignation his Ex-CEO, Group (Savola on was announced on Tadawul 28 October 2020, and it was effective as of 31 December 2020) Eng. Anees Ahmed Moumina Ex-CEO until 31 (Savola Group December 2020) Mr. Nouman Farrukh Muhammad Nouman Farrukh Muhammad Mr. Abdussalam Chief (Ex-Group until 31 December Financial Officer, 2020) Description of any interest of Board members and their relatives in shares or debt instruments in Herfy Food or debt in shares members and their relatives of Board Description of any interest 6. members: First: Board 1. No. No. 7. 2. Second: Senior Executive resigned during 2020 Second: Senior Executive resigned – Second: Board members’ relatives: N/A members’ relatives: Second: Board Executive Management: Third: 1. – Fourth: Executive Managements’ relatives: N/A Fourth: Executive Managements’ relatives: Third: Senior executives’ relatives: N/A Senior executives’ relatives: Third: e–3) Services Co. (a listed subsidiary of Savola Group):
0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% of change of change (37.05%) Percentage Percentage Percentage continued – – – – – – _ – – – – – – – – (83,600) Net change Net change
- - - - – – – – – – _ – – – – – Debt Debt instruments instruments continued – _ – 26 26 End of theyear End of the year Shares Shares 1,000 1,025 1,000 2,500 1,000 2,000 1,000 1,000 1,000 2,500 142,060
- - - - – – – – – – – _ – – – – Debt Debt instruments instruments – _ – 26 26 Shares Shares 1,000 1,025 1,000 2,500 1,000 2,000 1,000 1,000 1,000 2,500 Board members and their relatives Board Board members and their members relatives: Board Beginning of the year Beginning of the year 225,660 Mr. Waleed Khalid Fatani Waleed Mr. CEO as of (Savola Group 1 January 2021) Mr. Sulaiman Abdulkadir Al Muhaidib Mr. Names of members whom the interest, Names of members whom the interest, contractual securities or rights issue belongs to Names of members whom the interest, contractual securitiesor rights issue belongs to Mr. Sameh Hassan Mr. (Savola Foods Co. CEO) Mr. Bader Abdullah Al Issa Mr. Mr. Abdulaziz Khaled Al Ghufaily Mr. Hamooh Bander Talaat Dr. (Panda Retail Co. CEO) Mr. Essam Abdulkadir Al Muhaidib Mr. Usman Khan Wajid Mr. (Chief Financial Officer as of 1 January 2021) Eng. Mutaz Qusai Alazawi Mohammed Nasr Mr. - Investment) (Executive Director Mr. Fahad Abdullah Al Kassim Mr. Mr. Mohammed Ibrahim Al Issa Mr. Mr. Abdulrahman Mohammed Ramzi Abdulrahman Mohammed Mr. Addas Dr. Adnan Abdulfattah Soufi Dr. Mr. Rakan Abdulaziz Al Fadl Mr. Mr. Bader Hamad Al Rabiah Mr. The relation between the paid remuneration and the adopted Remuneration Policy: between the paid remuneration The relation Description of any interest of the Board members and their relatives in shares or debt instruments of the or debt Company: in shares and their members relatives of the Board Description of any interest Description of any interest of the senior executives and their relatives in shares or debt instruments of the in shares of the senior executives and their relatives Description of any interest
Description of any interest of the Board Members, senior executives and their relatives of the Board Description of any interest Remuneration of the Board, Committee and Executive members Management Remuneration of the Board, First: Board members: First: Board 1. First: Board members: First: Board 1. No. No. 2. 2. 3. 3. 4. 4. 5. 5. 6. 7. 8. 9. 10. 11. Second: Board members’ relatives: N/A members’ relatives: Second: Board e) e–1) d–7) in this Executive Management, mentioned earlier and its Committees and of Directors policy of the Board Based on the remuneration for is proposed and the Executive Management and what its Committees, paid for the Board, the remuneration Report, and in light of it. any material deviation from policy without it shows Savola conforming with the approved the Board, Corporate Governance Report and Major Relevant Disclosures Disclosures Relevant and Major Report Governance Corporate e) Directors’ Report Directors’ Company: e–2) The Savola Group Annual Report 2020 The Savola Group 96 OVERVIEW STRATEGIC REVIEW DIRECTORS’ REPORT FINANCIAL STATEMENTS 99 SAR 10 SAR 10 533,980,684 497,856,839 adawul and SAR 5,339,806,840 SAR 5,339,806,840 Value in SAR/Number of shares in SAR/Number of Value Audit Committee meeting to recommend to the Board approval of the financial approval to the Board Audit Committee meeting to recommend for the fourth quarter of 2020 results results for the fourth quarter the financial meeting regarding of Directors’ Board decision during the of 2020 which will be announced in the light of the Board’s period prescribed results for financial Earning call for Institutional investors and Analysts regarding Q4, 2020. for 2020 results the audited financial Audit Committee meeting regarding of Directors by Board results for 2020 will be approved The annual financial Date of publishing the Annual Financial Results of year 2020 on T then Savola website Annual Report for 2020 Date of publishing the Savola Group of the financial approval to the Board Audit Committee meeting to recommend for the first quarter of 2021 results Key events for 2021 Detail Company authorized capital shares)* ordinary are shares (all Company’s Issued shares records)** (by Tadawul Floated issued shares Paid-up capital Nominal value per share Paid-up value per share Dates 2021 27 January 27 January Within one week after financial announcement results 15 March 15-16 March 16-17 March 17-31 March 28 April Dates of key events for shareholders and investors: Dates of key events for shareholders Presenting the shareholders’ proposals and comments (if any) to the Board members at the nearest meeting or any other effective or any other effective meeting members at the nearest comments (if any) to the Board and proposals the shareholders’ Presenting to achieve the purpose on an ongoing basis. means of communication on the substantive proposals briefing the Board and with investors (Investor Relation Programs) continuous meetings Organizing they make. during the their suggestions to the Board raise shareholders the General Assembly meetings where members attending The Board these suggestions during the meeting. to responds meeting and the Board The total number of floated shares changes from time to time based on the trading movement of Savola Group shares on the Saudi shares time to time based on the trading movement of Savola Group changes from The total number of floated shares 2021. on 1 March records Tadawul’s has been taken from shares Stock Exchange. Please note that the number of floated The Group does not have preferred shares or shares with special priority rights of voting, issued to either shareholders, Board of Directors or of Directors Board with special priority rights of voting, issued to either shareholders, or shares shares does not have preferred The Group as specified by of equal nominal value and rank equally in voting rights and other rights shares ordinary are of the Group employees. All shares regulations. 2. 3. 4. 5. No. 1. 2. 3. 4. 5. 6. 7. 8. No. 1. 6. Declaration: g–3) Procedures for informing the Board members of the shareholders’ suggestions and notes on the and Company for informing members of the shareholders’ the Board g–3) Procedures its performance: comments on the Company and its performance and through proposals informed members of the shareholders’ Keeping the Board the following procedures: 1. 2. 3. of and the performance suggestions (if any) the presence without discusses the shareholders’ In addition, the Chairman of the Board any of the executives (whenever deemed necessary). as of 31 December 2020: equity profile g–4) Savola Group * ** g–5) with international the dates of key anticipated events during best practice in Corporate Governance,In accordance Savola shares and investors: to our valued shareholders 2021 which may be of interest
continued adawul) website, in daily Announcement The Board approve to buy back Savola shares to retain them as Treasury Shares under the Employees Employees the under Shares Treasury as them retain to shares Savola back buy to approve Board The (Savola intention to purchase in Tadawul and it was announced (LTIP) Program Incentive Long-Term its shares) 2019 (12 months) for the period ended on 31 December results the interim financial Approve of cash dividend for the year 2019 Recommend the distribution 2019 Results for the period ended on 31 December the Annual Financial Approve General Assembly Meeting No.32 (First meeting) to attend the Extraordinary Invite the Shareholders General on the agenda of its Extraordinary Voting The commencement date of the Electronic Assembly Meeting (No. 32) (First meeting) No. (32) (First meeting) General Assembly Meeting of the Extraordinary The results Committee member) (an Audit Omar Kurdi of Dr. The resignation 2020 ( 3 months ) ended on 31 March the Interim Financial Results for the period Approve ended on 30 June 2020 (6 months) the Interim Financial Results for the period Approve (First tranche) of the buyback of its shares announces the results Savola Group Garaawy (an Audit Committee member) Abdullah Al Tareq The appointment of Mr. ended on 30 September 2020 (9 months) the Interim Financial Results for the period Approve CEO Group CEO and appoint a new of the Group the resignation Approve 29 January 2020 29 January 2020 29 January 2020 2020 17 March 06 April 2020 23 April 2020 30 April 2020 30 April 2020 30 April 2020 16 August 2020 14 September 2020 06 October 2020 28 October 2020 28 October 2020 Date Shareholder rights and mechanisms of communication: Shareholder and investors to access information:Enable shareholders Shareholders’ rights and investor relations Shareholders’ The major Board resolutions and important events during the year, which some of them announced through Tadawul Tadawul some of them which announced through events during the and important year, resolutions The major Board No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. or were published on the Company website: or were f) Corporate Governance Report and Major Relevant Disclosures Disclosures Relevant and Major Report Governance Corporate Directors’ Report Directors’ newspapers and in the annual Directors’ Report. A dedicated department manages and deals with shareholder affairs and responds to and responds affairs Report. A dedicated department manages and deals with shareholder newspapers and in the annual Directors’ their enquiries. Savola publishes financial statements, announcements and key decisions on the Saudi Stock Exchange (T Savola publishes financial statements, announcements and key decisions on the Saudi Due to the Group’s belief, interest and care in the rights of its shareholders, and in light of applicable regulations, these rights form and in light of applicable regulations, in the rights of its shareholders, and care belief, interest Due to the Group’s website. bylaws and Corporate Governance on Savola’s Manual, which can be viewed part of Savola’s g–2) g–1) g) and because of the investors and all stakeholders, with shareholders, relationship commitment to enhancing its Illustrating Savola’s internal rights and maintain effective shareholders’ the importance of corporate governance beliefs in to protect strong Group’s and and commitment to the principles of disclosure and its Committees’ roles, the activation of the Board through controls Governance continued to implement and comply with the Corporate Regulations of Saudi during 2020, the Group transparency, results previously In addition to the performance and financial regulations. Capital Market Authority and other relevant Arabia’s regulations and investor community in line with relevant to its shareholders outlined, Savola discloses information that is of interest are: These in corporate governanceand best international and transparency. practices adopted by the Group The Savola Group Annual Report 2020 The Savola Group 98 OVERVIEW STRATEGIC REVIEW DIRECTORS’ REPORT FINANCIAL STATEMENTS 101 1 1 1 1 5 12 83 19 456 94,781 95,360 5,796,236 52,174,769 372,446,481 161,534,203 476,009,679 533,980,684 533,980,684 Number of Shares Number of Shares Number of Investors SAR 400.49 million SAR 400.49 million 84 910 578 Total recommended dividends (SAR) recommended Total 100% 8.23% 8.22% 6.36% 6.58% 0.31% 0.02% 94,366 20.66% 11.24% 22.03% 16.35% 95,360 94,782 95,360 Number of Investors mal approval from the relevant official the relevant from mal approval Number of Investors Percentage of Ownership Percentage 100% 1.09% 9.77% 89.14% 100% 69.75% 30,25% Percentage of Ownership Percentage (SAR 0.75 per share) which represents which represents (SAR 0.75 per share) 7.5% of the nominal value of the share Proposed dividend ratios Proposed at the end of the year Percentage of Ownership Percentage Percentage of interim dividends distributed during Percentage the year No interim dividends were distributed during the year 2020 Investor Nature GOSI and other Governmental or semi-Governmental Investors Percentage Total Investor Nature Corporate Investors Investor Nationality Saudi Investors Assila Investments Co. GCC funds Swap agreements Individual Investors (including share Individual Investors (including share certificates holders) Total GCC Investors Investors Foreign Total Abdulkadir Al Muhaidib & Sons Co. Abdullah M.A. Al Rabiah Mr. Al Muhaidib Holding Co. Saudi funds certificate holders) Other Individual Investors (including share Other Corporate Investors Total Shareholders' Information Price Data: Shareholders' and Share an overview of Savola’s the following tables provide records, as per Tadawul shareholders As of 31 December 2020, Savola had 95,360 including criteria and types: ownership structure of investor: to nature a) Savola Investors according b) Savola Investors according to their nationality: b) Savola Investors according to their nature: c) Savola Investors according b) Dividends proposed for distribution their for 2020 and payment process: b) Dividends proposed 2021, and in light of the in its meeting on 27 January Board the Savola Group Distribution Policy, In light of the above Dividends million (i.e. SAR recommended the distribution of SAR 400.49 to SAR 910.8 million for the year 2020, amounted achieved net profit value. The maturity date nominal share 7.5% of the Company’s for the year 2020, which represents as cash dividends 0.75 per share) the second trading day following the at the end of in Tadawul registered who are will be for all shareholders for these cash dividends fixed after securing the for Assembly Meeting (AGM) which will be day of the Annual General after the approval The dividends will be paid recommendation. the above Board’s the said AGM will ratify authorities, and accordingly, will be published on be detailed in the announcement, which accounts as will deposited in the shareholders’ of the AGM and will be at a later date. Tadawul dividends to be distributed for 2020: • The following statement shows the proposed continued Board of Directors’ meeting regarding the financial results for the first quarter results the financial meeting regarding of Directors’ Board the decision during in the light of the Board’s of 2021 which will be announced period prescribed as per Meeting (AGM) which will be announced Hold the Annual General of the official authorities) the approval date subject to (proposed regulation results for financial Earning Institutional investors and Analysts regarding call for Q1, 2021. of the financial approval to the Board to recommend Audit Committee meeting 2021 for the second quarter of results second quarter of 2021 on results for the Date of publishing the financial of the based on the recommendation by the Board once approved Tadawul Audit Committee results for financial Earning and Analysts regarding call for Institutional investors Q2, 2021. of the financial approval Board to the Audit Committee meeting to recommend quarter of 2021 for the third results quarter results for the third the financial meeting regarding of Directors’ Board decision during the of the Board’s of 2021 which will be announced in the light period prescribed results for financial Earning and Analysts regarding call for Institutional investors Q3, 2021. the strategy for to review of Directors Conduct annual workshop for the Board and its subsidiaries. the Group continued 28 April 28 April Withinresults week after financial one announcement 3 August 4-5 August Within results one week after financial announcement 28 October 28 October Within results one week after financial announcement 2nd half of 2021 Shareholder shall be entitled to his share of dividends as per the general assembly resolution issued in this regard in the issued in this regard of dividends as per the general assembly resolution shall be entitled to his share Shareholder date and the distribution date. The shall specify the maturity The resolution of Directors. of the Board recommendation at the end of the maturity date. records in the shareholders’ registered who are shall be to the shareholders entitlement of profits after fulfilling the or bi-annual) to its shareholders under its bylaws, distribute interim dividends (quarterly The Company may, statutory requirements. The Dividends Distribution Policy:
Shareholders’ rights and investor relations and investor relations rights Shareholders’ 10% of the net profits shall be set aside to form a statutory reserve. However, the ordinary general assembly may discontinue such the ordinary reserve. However, shall be set aside to form a statutory 10% of the net profits totals 30% of the paid-up capital. when the reserve procedures or ensures interests in the amount that serves the Company’s general assembly may decide to allocate other reserves, The ordinary such the net profits as well, deduct from The said assembly may, as much as possible to shareholders. distribution of stable profits employees. institutions for the Company’s aid to social for the setting-up of or providing required amounts as are by required as of Directors recommendation of the Board pursuant to a shall be distributed to shareholders profits The remaining (46) of the bylaws which states that: of Article taking into account the provisions in this regard, the regulations – – The policy: 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 used to distribute cash dividends in the the Group bylaws, In light of the dividends policy and the Group’s recommendations. of Directors’ achieved during each financial year based on the Board the net profit 9. 10. 11. 12. 13. 14. 15. 16,. 17. 18. a) shall be distributed as follows: annual net profits Company’s As per Article (45) of the Company bylaws the 1. 2. 3. g–6) Note: Savola would like to point out that the above dates are approximate and may change according to notifications received from official authorities. received from to notifications and may change according approximate dates are Note: Savola would like to point out that the above to do so. failure Although Savola is determined we assume no obligation from to carry out these events on the planned dates, Corporate Governance Report and Major Relevant Disclosures Disclosures Relevant and Major Report Governance Corporate g) Directors’ Report Directors’ 4. The Savola Group Annual Report 2020 The Savola Group 100 OVERVIEW STRATEGIC REVIEW DIRECTORS’ REPORT FINANCIAL STATEMENTS 103 0% 0% 0% 0% 0% change Percentage Percentage - - - - - Shares Shares change 2020 6.36% 6.67% 8.22% 8.23% 11.24% Percentage Percentage at the end of end of 2020 Shares at the Shares 33,980,684 35,626,085 43,892,500 43,966,110 60,000,000 ests during the last fiscal year of 2020 6.36% 6.67% 8.22% 8.23% 11.24% Ownership at the beginning 2020 Purpose of keeping the shares as Treasury Shares as Treasury Purpose of keeping the shares To retain the shares as Treasury Shares under the Employees LTIP which under the Employees LTIP Shares as Treasury the shares retain To outstanding talent and to motivate them to aims to attract and retain their performance achieve Savola Group to further strengthen employees as to the eligible will be transferred objectives. The shares after the by the Board conditions and policy approved per the program allocation date) the vesting period elapses (i.e. after 3 years from to each tranche starting date. according beginning of Shares at the Shares 33,980,684 35,626,085 43,892,500 43,966,110 60,000,000 2020 (5 Reports) To review the changes in share ownership for investor relations purposes relations ownership for investor the changes in share review (5 Reports) To which is being published on the Company’s screen and to update the transparency website 7 Reports To determine the eligibility for dividends and its distribution To To determine the eligibility for attending the Extraordinary General Assembly Meeting Assembly General determineExtraordinary the attending for eligibility the To (No. 32) Reason Date of retention Date of retention 13 September Company of their holdings, together with any change to such inter Company of their holdings, together Saudi Company Saudi Government Institution Saudi National Saudi Company Saudi Company Nationality Treasury Shares Treasury SAR 16,508,713 Value of the retained of the retained Value 341,675 2 January, 8 April, 1 July, 6 8 April, 1 July, 2 January, September and 31 December 3 May Date of request 29 April Al Muhaidib Holding Co. General Organization General Organization for Social Insurance (GOSI) Mr. Abdullah M.A. Mr. Al Rabiah Abdulkadir Al Muhaidib & Sons Co. Name Assila Investments Co. Major shareholders list: Major shareholders for 2020: thereof dates and reasons records, of shareholders requests Number of Company’s Treasury Shares Treasury 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 relatives) senior executives and their directors, (other than the Company’s held by persons in a class of voting shares Description of any interest Number of retained Number of retained 5. 4. Total 3. 3. 2. 2. No. 1. 1. No. Regarding the declaration of movements in major shareholders’ ownership in accordance with listing rules, the Group rules, the Group with listing ownership in accordance the declaration of movements in major shareholders’ Declaration: Regarding indicating any changes or from any of its major shareholders written notification during 2020 received any confirms that it has not on 31 records disclosed information The is based on the Saudi Stock Exchange (Tadawul) movement in their ownership percentages. December 2020. g–7) 2020 (in SAR): and movements during of the Group, of the total shares or more owning 5% shareholders Below are Shares: Treasury g-8) Details of retained g–9)
50 32 206 220 993 925 Close 5,103 35.75 33.45 35.70 40.50 40.65 42.10 46.50 48.60 48.00 45.80 46.05 42.50 21.6% 87,831 95,360 2019-2020 Change from Change from 5,207,118 continued 528,773,566 533,980,684 Number of Shares Number of Investors Low 35.50 32.05 35.05 40.15 40.30 42.00 46.05 48.05 47.95 45.80 45.10 42.50 100% 4.05% 8.89% 2.89% 3.95% 1.16% 1.89% 1.59% 51,698 43,662 75.58% 95,360 High 52-week low 29.00 36.10 33.45 35.90 41.20 41.80 43.05 46.95 49.40 48.30 48.00 46.05 43.00 Number of Investors Percentage of Ownership Percentage 100% 0.98% 99.02% 52-week high 54.00 Percentage of Ownership Percentage continued Share price Share 3 years ago 42.15 Share price Share 31 December 2020 42.50 Shareholders’ rights and investor relations and investor relations rights Shareholders’ More than 1 million shares than 1 million shares More shares 500,000 to less than 1 million From shares 100,000 to less than 500,000 From shares 50,000 to less than 100,000 From shares 10,000 to less than 50,000 From shares 5,000 to less than 10,000 From 1,000 to less than 5,000 shares From Less than 1,000 shares Total Ownership Size Month 34.95 Share price Share 1 January 2020 Ownership Type Investment Portfolios Shares Certificates Shares Total January February March April May June July August September October November December e) Savola Investors according to their ownership type: e) Savola Investors according Shares performance summary at the end of each month (high, low, and closing) during the fiscal year 2020 (all information and closing) was performance summary at the end of each month (high, low, Shares website): – Tadawul’s page in the Saudi Stock Exchange the Company’s obtained from f) Share price data (SAR) f) Share d) Savola Investors according to their the percentage of ownership: to their the percentage d) Savola Investors according Corporate Governance Report and Major Relevant Disclosures Disclosures Relevant and Major Report Governance Corporate g) Directors’ Report Directors’ The Savola Group Annual Report 2020 The Savola Group 102 OVERVIEW STRATEGIC REVIEW DIRECTORS’ REPORT FINANCIAL STATEMENTS 105 Name of the Board member/ senior executive or to any one any person related of them Mr. Sulaiman Abdulkadir Mr. Al Muhaidib who is the chairman of Abdulkadir Al Muhaidib & Sons Co. as well as the Group Chairman of Savola, in Essam addition to, Mr. Abdulkadir Al Muhaidib who is the Managing of Abdulkadir Al Director Muhaidib & Sons Co. as member well as a Board of Savola. Business and contracts commercial between Abdulkadir Al Muhaidib & Sons Co. 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. elated to any of them has Annually The duration of the transaction or contract In the ordinary course In the ordinary of business and general commercial terms worked without any preferential (including treatment quality, product payment method, pricing, delivery, In the ordinary course In the ordinary of business and general commercial terms worked without any preferential (including treatment payment renewal, methods, maintenance, insurance, etc.) The conditions of the transaction or contract SAR 32,000 SAR 555,000 SAR 335,000 contract for 2020 The value amount of the transaction or SAR 5.83 million SAR 7.20 million SAR 5.49 million SAR 34.31 million SAR 105.88 million SAR 131.64 million SAR 345.21 million SAR 636.78 million Purchasing food products by Panda food products Purchasing Retail Co. (a subsidiary of Savola) Mayar Foods Co. from Purchasing food products by Panda food products Purchasing Retail Co. (a subsidiary of Savola) Del Monte Saudi Arabia from Purchasing food products by Panda food products Purchasing Retail Co. (a subsidiary of Savola) and its Nestle Group from subsidiaries. by Panda food products Purchasing Retail Co. (a subsidiary of Savola) Factory Co. Ltd. Manhal Water from Leasing spaces by Panda Retail Co. (a subsidiary of Savola) from Abdulkadir Al Muhaidib & Sons Co. Leasing spaces to sell its products along with trading foods products inside Panda Shopping Centers by Panda Retail Co. (a subsidiary of Savola) to Almehbaj Alshamiyah Co. Trading Leasing spaces to sell its products Leasing spaces to sell its products inside Panda Shopping Centers by Panda Retail Co. (a subsidiary of Savola) to Del Monte Saudi Arabia Scrap sales by Panda Retail Co. (a subsidiary of Savola) to Waste Collection & Recycling Company Leasing spaces to sell its products inside Panda Shopping Centers by Panda Retail Co. (a subsidiary of Co. Savola) to Zohoor Alreef by Panda food products Purchasing Retail Co. (a subsidiary of Al Jazirah Dates & Savola) from Food Factory The nature of the transaction or contract The nature Transactions with related parties that took place during 2020, these transactions will be renewed for the upcoming year parties that 2020, these took place during transactions will be renewed with related Transactions in this regard: in the upcoming AGM meeting as per laws and regulation direct or indirect interest. The total amount of the transactions is SAR 636.78 million. The total amount of the transactions interest. or indirect direct 1. No. a. Savola and Al Muhaidib: Muhaidib & Sons Co. and its subsidiaries or any person r Business or contract in which Abdulkadir Al 2. 3. 4. 5. 6. 7. 8. 9. 10. Total h) a senior member, Information business or contract to which the to any is a party and in which a Board Company relating to any of them was of interest: is or executive or any person related the between Company and Abdulkadir Al Muhaidib & interest or indirect contracts with and a direct 1) Transactions of them: to any and their subsidiaries or any person related Sons Co. and Al Muhaidib Group - - Date 97.8% 43.97% 33.68% 52.06% Percentage continued 15 April 2006 25 March 2008 25 March 11 October 2006 04 November 2013 16 November 2005 910,802 475,630 (SAR’000s) Net income (520,380) (363,287) 1,025,618 1,528,383 Issue Type - Right Issue Acquisition Bonus Shares Bonus Shares Bonus Shares 400,486 160,194 533,980 400,486 1,495,146 Total of Dividends Total distributed/ declared distributed/ declared for the year (SAR’000s) - 1 2020 (SAR) 0.75 0.30 0.75 400,486 Previous Capital Previous Dividends per share Dividends per share 3,750,000,000 3,000,000,000 1,800,000,000 1,500,000,000 5,000,000,000 2019 continued 160,194 2017 533,980 New Capital 2016 5,000,000,000 3,750,000,000 3,000,000,000 1,800,000,000 5,339,806,840 400,486 0 Shareholders’ rights and investor relations and investor relations rights Shareholders’ 2016-2020 2020 2019 2018 2017 2 3 4 5 Year Year 2016 1 No. 100,000 200,000 300,000 400,000 500,000 600,000 Dividends Corporate Action Corporate Governance Report and Major Relevant Disclosures Disclosures Relevant and Major Report Governance Corporate g) Directors’ Report Directors’ Total of Dividends distributed/declared for the year (SAR ’000s) of Dividends distributed/declared Total The Savola Group Annual Report 2020 The Savola Group 104 OVERVIEW STRATEGIC REVIEW DIRECTORS’ REPORT FINANCIAL STATEMENTS 107 Value/Amount SAR 963,000 SAR 14.1 million SAR 2.73 million SAR 165.72 million SAR 75.89 million SAR 34.72 million SAR 17.20 million SAR 26.09 million SAR 34.71 million Dur Hospitality Co., Badr Abdullah Mr. where Al Issa is a Board member and he is also a member of Panda Board Retail Co. (a subsidiary of Savola) Name of the Board member/ Name of the Board senior executive or any person to any one of them related Kinan International for Real Estate Development Co., of which Savola owns 29.99%, and Savola has two members on Kinan’s Mohammed Mr. Board: Ibrahim Al Issa a Savola and Eng. member, Board Anees Ahmed Moumina CEO until 31 Group December 2020. Duration During 2020 During 2020 During 2020 During 2020 During 2020 During 2020 During 2020 During 2020 During 2020 Annually The duration of the transaction or contract Trade Transaction Transaction Trade Non-trade Non-trade Trade Non-trade Non-trade Trade Non-trade In the ordinary In the ordinary course of business and general terms commercial worked without any treatment preferential including renewal, payment methods, maintenance, insurance, etc. The conditions of the transaction or contract contract for 2020 The value amount of the transaction or SAR 33.33 million SAR 10.50 million Relationship Shareholder’s of a subsidiary Shareholder’s Shareholder’s of a subsidiary Shareholder’s Associate Shareholder of a subsidiary Shareholder Associate Associate Associate Related party of USC Certain shareholders Certain shareholders of AIC Certain shareholders Intaj – Savola Investments Arabian Centers Company – Al Hokair Seafood International One FZCO – SFC Khairat Al Sharq for General Trade for General Trade Khairat Al Sharq and Manufacturing Foodstuff Company United Sugar Co. Egypt – SFC Leasing of shops by Panda Retail Leasing of shops by Panda from Co. (a subsidiary of Savola) Kinan International for Real Estate Development Co. Leasing of shop by Panda Retail Co. (a subsidiary of Savola) from Dur Hospitality Co. The nature of the transaction or contract The nature Transactions and contracts with a direct or indirect interest between the between Company and othercompanies: interest or indirect contracts with and a direct Transactions A description of any transaction between the Company and any related party: A description of any transaction between the Company and any related No. 1. No. 1. 2. 2. 3. 4. 5. 6. 7. 4) i) in the normal course of business with and leases of stores of products sale and purchase The following transactions mainly represent the between the parties, with mutually agreed The terms to subsidiaries. of such transactions are associates and other entities related parties: over third same conditions and with no preference
continued Almarai, a listed company in which Savola owns 34.52%. Group of Savola Directors Three Almarai’s of members are Sulaiman (Mr. Board Abdulkadir Al Bader Muhaidib, Mr. Abdullah Al Issa as well as Eng. Anees Ahmed CEO Moumina Group until 31 December 2020). Herfy Food Services Co., a listed company, in which Savola Group and owns 49% (directly Savola has indirectly); on (3) representatives Essam Mr. Board: Herfy’s Abdulkadir Al Muhaidib, who is the Chairman of and Eng. Herfy Board, Mutaz Qusai Alazawi also Board who are members of Savola as well as Eng. Group, Anees Ahmed Moumina CEO until 31 Group December 2020. Name of the Board Name of the Board member/ senior executive or to any one any person related of them Name of the Board member/ senior executive or to any one any person related of them Annually Annually The duration of the transaction or contract The duration of the transaction or contract elated to any of them has direct or elated to any of them has direct continued
elated to any of them, has a direct or indirect or indirect has a direct elated to any of them, In the ordinary In the ordinary course of business and general terms commercial worked without any treatment preferential (including renewal, payment methods, maintenance, insurance, etc.) course In the ordinary of business and general commercial terms worked without any preferential (including treatment quality, product payment method, delay pricing, delivery, penalties, etc.) In the ordinary course In the ordinary of business and general commercial terms worked without any preferential (including treatment quality, product payment method, pricing, delay delivery, penalties, etc. The conditions of the transaction or contract The conditions of the transaction or contract contract for 2020 contract for 2020 The value amount The value amount of the transaction or of the transaction or SAR 2.26 million SAR 3.39 million SAR 43.1 million SAR 2.59 million SAR 8.89 million SAR 39.19 million SAR 38.18 million SAR 51.34 million SAR 801.08 million SAR 887.34 million Selling sugar by United Sugar Co.(a subsidiary of Savola Food Co.) to Herfy Food Services Co. The sale of specialty fats products by the International Foods Industries Co. (a subsidiary of Savola Foods Co.) to Herfy Food Services Co. Selling sugar by United Sugar Company (a subsidiary of Savola Foods Co.) to Almarai Co. and its subsidiaries purchases Leasing shops and retail by Panda Retail of food products Co. (a subsidiary of Savola) to/from Herfy Food Services Co. by Afia Selling edible oil products International (a subsidiary of Savola Foods Co.) to Herfy Food Services Co. Selling specialty fats products by Selling specialty fats products International Foods Industries Co. (a subsidiary of Savola Foods Co.) to Almarai Co. Purchasing consumer foods goods consumer foods goods Purchasing subsidiary by Panda Retail Co. (a and its Almarai Co. of Savola) from subsidiaries by Afia products Purchasing International Distribution and Marketing Co. (a subsidiary of Almarai Co. Savola Foods Co.) from The nature of the transaction or contract The nature The nature of the transaction or contract The nature Transactions and contracts with a direct or indirect interest between the Food Services Co.: Company and Herfy interest or indirect and contracts with a direct Transactions Transactions and contracts with a direct or indirect interest between the Co.: Company and Almarai interest or indirect contracts with and a direct Transactions Transactions with related parties that took place during 2020, these transactions will be renewed for the for upcoming year parties that during 2020, these took place transactions will be renewed with related Transactions in this regard in the AGM meeting upcoming laws and regulation as per 3. 4. Total 2. c. Savola and Herfy Co: Co. and its subsidiaries or any person r Business or contract in which Herfy Food Services The total amount of the transactions is SAR 51.34 million. interest. indirect 1. 2. No. 3. No. Co: b. Savola and Almarai person r which Almarai Co. and its subsidiaries, or any Business or contract in transactions is SAR 887.34 million. The total amount of the interest. 1. 4. Total 3) 2) Corporate Governance Report and Major Relevant Disclosures Disclosures Relevant and Major Report Governance Corporate h) Directors’ Report Directors’ The Savola Group Annual Report 2020 The Savola Group 106 OVERVIEW STRATEGIC REVIEW DIRECTORS’ REPORT FINANCIAL STATEMENTS 109 ogram in an aggregate amount of SAR 1 ogram in an aggregate e approved by the competent administrative e approved ogram to a number of investors in an aggregate investors in an aggregate ogram to a number of Reasons for not adopting optional items The Board postponed the formationThe Board of a Risk Management of the risk management Committee (RMC) until the infrastructure the risk management department is completed, currently department was established under the leadership of a specialized Risk Management Officer and the Risk Management The Risk Management by the Board. policy was approved working with the departments, on Group Officer is currently risk of the current and subsidiaries level, to enhance the role department further and carry out the Risk Management role, In addition, the Company is using an activities, and procedures. Also the Company is external entity specialized in the Risk area. working on implementing a Governance, Risk and Compliance enhance the to effectively Savola Group system across and the Executive Management team participation of the Board a unified vision of the to ensure in the risk management process and its subsidiaries. The RMC will be risks faced by the Group of risk after completion of the infrastructure formed by the Board management department and whenever it deems necessary. The Article/Clause Composition of the Risk Management Committee: shall, by resolution Board “The Company’s form a committee to be named the therefrom, (Risk Management Committee). The Chairman and majority of its members shall be Non-Executive The members of that Committee shall Directors. possess an adequate level of knowledge in risk management and finance.” There are no doubts about the Group’s ability to continue its business activities. ability to continue no doubts about the Group’s are There The Company’s accounting records were properly prepared. properly were records accounting The Company’s Savola Group’s internal control systems and procedures were properly developed and effectively executed. developed and effectively properly were and procedures systems internal control Savola Group’s Declaration/Confirmation There is no arrangement or agreement under which a shareholder of the issuer has waived any rights to dividends. of the issuer has under which a shareholder is no arrangement or agreement There confirms that: The Board A) B) C) did decisions. The Board of Directors’ Board Audit Committee that conflicted with the by the was no recommendation There determinationthe dismissal, its external auditor, Company’s the of appointment the regarding recommendations any reject not of its fees, the performance of the internal evaluation or the appointment during the year. auditor Sukuk Pr January 2013 the first tranche of the The Company issued during issued other Sukuk pursuant to a new Pr amount of SAR 1.5 billion and in July 2019, Sukuk issued in 2013; while the issued for monetary consideration, and some exchanged with the previous billion, some were on its original maturity date (due in January 2020). redeemed were Program issued under the previous remainder Article/ Clause No. Article 70 (optional) Procedure set by the Group to monitor the effectiveness of Savola’s CG Code: of Savola’s to monitor the effectiveness the set by Group Procedure The Group has a Corporate Governance (CG) Manual which was developed and approved for the first time in 2004, and has been has a Corporate Governance (CG) Manual which was developed and approved The Group The Company issued by the CMA and international practice in CG and transparency. best updated in line with the CG regulations during 2017-2019 following the issuance of the Corporate Governance and updated its CG framework and policies has reviewed issued in 2018, and all updates wer Regulations in February 2017 and the amendment applicable). Assembly (where or the General of Directors bodies, whether the Board duties and the committee charter was amended accordingly and responsibilities was added to the RNC’s The CG Committee role Management monitor the Corporate and the Executive of Directors Also, the Board by the General Assembly. and was approved to monitor CG code In addition, the Compliance Officer has a support team at Group-level Governance requirements. reports CG and submit regular regarding resolution of the Board’s implementation proper implementation and compliance, ensure and CEO supervise the overall implementation and development of the governance code Board The Group to the Board. in general. and international meet regional to enhance its CG practices to time to time CG Expert Firms in order appoints from The Group best practices in this field. and international rating agencies and institutions with the objective to its CG experience with local, regional shares The Group a plan for improvement. develop and weaknesses and accordingly identify its strengths on its website (www.savola.com). in this respect has disclosed its CG framework and all policies The Group No. 1. No. 20. 21. 22. 23. j–2) • • • • • j–3) been implemented of the have/have not Corporate Governance What provisions Regulations, with justifications: of the Corporate Governance Regulations issued by the CMA, except for the following The Company applies all the provisions optional items continued eholders’ voting rights. eement with: d members or rendered guarantees with respect to guarantees with respect d members or rendered Declaration/Confirmation A Director: (applicable): Mr. Sulaiman Abdulkadir Al Muhaidib (the Chairman of the Board of Directors), has donated his has donated his of Directors), Sulaiman Abdulkadir Al Muhaidib (the Chairman of the Board (applicable): Mr. A Director: attendance allowance, expenses allowance for the fiscal year 2020 of SAR 230,435 to support the remuneration, annual Board Fund. Employee Takaful Group’s (not applicable). A senior executive of the Group: The External Auditors’ report for the year 2020 does not contain any reservations on the relevant annual financial statements. annual financial on the relevant any reservations for the year 2020 does not contain The External Auditors’ report in the event of auditors the CMA with any additional information as may be required provide is committed to The Board financial statements. on the annual any reservations expressing issued by SOCPA. with the accounting standards comply records books and The Company’s the External Auditors (KPMG), appointed for the fiscal to replace of Directors by the Board was no recommendation There during the year. replaced not financials and they were year of 2020 to audit the Group’s any fees in this during 2020 and did not receive consultancy services to the Group The External Auditors did not provide regard. the External Auditor to convene a General Assembly. from any request did not receive of Directors The Board whatsoever to any of its Boar The Company has not granted any cash loans items to the to add one or more a General Assembly or a request to convene any request The Company did not receive at least 5% of the equity share represent whose shareholdings a number of shareholders from agenda upon its preparation capital. of the any 2 or more from to call for an unscheduled meeting request a written did not receive The Chairman of the Board members during 2020. Board debts during the year 2020. did not waive any of the Company’s of Directors The Board and of Directors Board contractual documents and subscription rights that belong to the members of the is no interest, There the in (e–3) regarding or debt instruments of the subsidiaries except as mentioned in this Report in the shares their relatives Co. ownership of some of them in Herfy Food Services or in the shares contractual documents and subscription rights of senior executives and their relatives is no interest, There debt instruments of subsidiaries. relatives. and their Members and Senior Executives for Board Note: The Company has disclosed the conflict of interest and its subsidiaries except as detailed in this Report in the loans no debt instruments issued to Savola Group are There section. right or similar rights is no class and number of any convertible debt instruments, contractual securities, preemptive There issued or granted by the Company during the fiscal year. securities, warrants no conversion or subscription rights under any convertible debt instruments, contractually-based are There or similar rights issued or granted by the Company. value of such debt instruments and the or cancellation by the Company of any redeemable purchase is no redemption, There by its affiliates. by the Company and those purchased securities outstanding, whether listed securities purchased their members and senior executives and for anyone (except to the Board in any class of voting shares no interests are There and any changes in these rights during the last fiscal year. who have notified the Company with these interests, relatives) A description of waiving any salary or compensation by an arrangement or agr any loan entered into by a Board member with third parties. member with third into by a Board any loan entered or by any attachments imposed on the Company by the Capital Market Authority, no penalties or precautionary were There or judicial body. regulatory other supervisory, that might hamper the use of shar The Company has avoided taking any action Board Declaration according to CMA CG Regulations to CMA CG for 2020: Declaration according Board What has/has not been implemented of the CG regulations, CG procedure and effectiveness, and initiatives: and and effectiveness, CG procedure implemented of theWhat has/has not been CG regulations, 19. 1. 2. 3. 4. 5. 6. 10. 11. 12. 13. 14. 15. 16. 17. 18. No. 9. 7. 8. j–1) j) or non-existing matters, non-applicable Company to make a declaration regarding for the requirement As per the CG regulations undertakes the following: the Board Corporate Governance Report and Major Relevant Disclosures Disclosures Relevant and Major Report Governance Corporate Directors’ Report Directors’ The Savola Group Annual Report 2020 The Savola Group 108 OVERVIEW STRATEGIC REVIEW DIRECTORS’ REPORT FINANCIAL STATEMENTS 111
Experience eport to those shareholders who desire to obtain the same. who desire eport to those shareholders Qualifications earlier in the Director’s Report. earlier in the Director’s Previous positions Previous Current and previous positions, qualifications and experience were mentioned positions, qualifications and experience were and previous Current Current positions Current Mr. Mohammed Mr. Ibrahim Al Issa Bader Mr. Hamad Al Rabia Member name Fahad Mr. Abdullah Al Kassim Savola Group operating model Savola Group 2. 3. No. Audit Committee members: 1. 4. Audit Committee members’ qualifications: positions, qualifications and experience of the Audit Committee members and previous The schedule below describes current Introduction General Assembly of the issued from was formed charter was adopted by a resolution and its of Savola Group The Audit Committee In line with article (104) of the (101) and (104) of the Companies Law. of Articles to the requirements according shareholders and reports auditor’s financial statements and the the company’s states that, “The audit committee shall review Companies Law which its opinion regarding including a report prepare the audit committee must Further, if any. thereon, notes and give its comments The board it has carried out to the extent of its powers. system as well as the tasks internal control of the company’s appropriateness the scheduled at least twenty-one days before head office reports at the company’s copies of such shall file sufficient of directors such r assembly with a view to deliver a copy of meeting of the general of the assembly”. at the meeting shall be recited The report of in line with the requirements Committee Report for the year 2020, prepared Audit with you Savola Group pleased to share are We be glad to and will Market Authority and the Committee's charter, the Regulations and Rules of the Capital the Companies Law, during the General Assembly Meeting. the report the summary of after reciting answer any questions in this regard 1. Appointment 8 May General Assembly Meeting No. (31), held on Wednesday, Extraordinary Audit Committee was appointed at the Savola Group the formation of the the Companies Law Article No (101), which approved to Ramadan 3, 1440H, in line with 2019 corresponding of selected and guidelines, as well as remuneration its functions, responsibilities Audit Committee and the charter describing 2022. The Audit Committee includes in its 1 July 2019 to 30 September members for the new office term, beginning from Abdul Raouf Banaja (Independent External member), Dr. member), Fahad Abdullah Al Kassim (Independent Board membership Mr. member) and Mr. Mohammed Ibrahim Al Issa (Non-Executive Board (Independent External member), Mr. Ammr Khaled Kurdi Dr. Abdullah Al Garaawy based on the Tareq appointed Mr. In addition, the Board member). Bader Hamad Al Rabiah (Independent Board the 6 October 2020 until from (as an Independent External member) effective Remuneration Nomination Committee recommendation Abdullah Al Tareq office termAudit Committee, which ends on 30 September 2022. The appointment of Mr. of the end of the current the Audit Committee on 1 May 2020 due to his from Ammr Kurdi of Dr. resignation Garaawy comes in the vacant seat after the General Shareholders to the nearest is not final until presented Al Garaawy‘s appointment Tareq Mr. business commitments. However, as per the regulations. Assembly Meeting for approval 2. Meetings and as the Audit Committee will convene periodically based on Chairman invitation, at least 4 times per year, In line with its charter, The Committee held 6 quorum whether in person or by proxy. and majority attendance of members constitute a may be necessary, meetings held after the Pandemic spread (All Audit Committee meeting was reached. meetings during 2020 and the quorum for each of COVID-19). to limit the spread measures due to the precautionary video conference through 2020 were in March 3. the as a strategic investment holding company reflects by the Group "Operating model" adopted structure The organizational subsidiaries. the Group's independence of the operational aspects of Audit Committee on one hand and its subsidiaries’ Audit Committees on the other all interaction between the Group's Conversely, membership at the Audit Committees of the subsidiaries. representation governed by the Group's hand are as follows: Savola Group Audit Committee Report Committee Audit Group Savola for the2020 31 December year ended continued continued Reasons for not adopting optional items The RMC has not been formedThe RMC has not been due to the above-mentioned in No. (1). reasons formedThe RMC has not been due to the above-mentioned in No. (1). reasons for Corporate is no standalone committee There and monitor the to ensure Governance,however, was added the CG role requirements, implementation of CG and duties and the committee to the RNC responsibilities by the AGM. Also charter was amended and approved by the overseen and monitored are the CG requirements and the top Executive Management, in of Directors Board is a CG and Compliance Department with addition, there monitor to qualified team members at the Group-level proper CG code implementation and compliance, ensure issued regarding resolutions implementation of the Board’s In addition, the to the Board. reports CG and submit regular and and CEO supervise the overall implementation Board development of the governance code. the However, held 5 meetings during the year. The Board months” period indicated in exceeded the “three Board no meetings said article between two of its meetings, as scheduled during that period based on the approved were office term. meeting calendar at the beginning of the Board field of CSR, Savola has a clear policy and strategy in the of Directors. by its Board been approved which has already strategy has been very keen to implement such a The Group CSR activities and initiatives are for many years. Moreover, as well as on Report being disclosed in the annual Directors’ website. the Company’s Savola of the CSR programs, the sustainability ensure To Foundation (a non-profit established the Savola World Group under the supervision of the Ministry of Human organization and Social Development). The new foundation is Resources The Savola World fully funded by Savola Group. currently in of Trustees a Board Foundation is managed through of a dedicated team to implement addition to the presence the and initiatives. However, and oversee the CSR programs the said will present and the Board CSR policy was revised, General Assembly for Shareholders’ policy to the nearest approval. The Article/Clause Meetings of the Risk Management Committee: Meetings of the Risk Management Committee shall convene “The Risk Management every 6 months and as periodically at least once may be necessary.” Formationa Corporate Governance of Committee: forms a Corporate Governance“If the Board Committee, it shall assign to it the competences stipulated in Article (94) of these Regulations. Such Committee shall oversee any matters to the implementation of governance relating and with its reports the Board and shall provide at least annually.” recommendations Meetings: The Board shall convene no less than four “The Board and no less than one meeting meetings per year, months.” every three Social Responsibility: based on the General Assembly, “The Ordinary shall establish a policy recommendation, Board that guarantees a balance between its objectives and those of the community for purposes of of developing the social and economic conditions the community.” Competencies of the Risk Management Competencies of the Risk Committee Article/ Clause No. Article 72 (optional) Article 95 (optional) Article 32, Item (b) (optional) Article 87 (optional) Article 71 (optional) What has/has not been implemented of the CG regulations, CG procedure and effectiveness, and initiatives effectiveness, and procedure CG of the not been implemented What has/has CG regulations, 3. 4. 5. 6. No. 2. Corporate Governance Report and Major Relevant Disclosures Disclosures Relevant and Major Report Governance Corporate j) Directors’ Report Directors’ The Savola Group Annual Report 2020 The Savola Group 110 OVERVIEW STRATEGIC REVIEW DIRECTORS’ REPORT FINANCIAL STATEMENTS 113 - - Total 3 of 3 1 of 1 6 of 6 6 of 6 6 of 6 6 of 6 6 of 6 2,435 2,435 . table the Board the Board Other expenses remuneration remuneration Mentioned in √ √ √ √ √ √ 28 Oct Total 40,462 65,000 180,000 180,000 180,000 180,000 825,462 √ √ √ √ √ N/A 12 Aug 5,000 30,000 30,000 30,000 30,000 15,000 meetings attending √ √ √ √ √ 140,000 24 Jun Allowance for Fixed √ √ √ √ √ √ meetings) 35,462 50,000 N/A 29 Apr (Except for 150,000 150,000 150,000 150,000 685,462 for attending the allowance . Al Garaawy comes in the vacant seat Remuneration √ √ √ √ √ √ 16 Mar √ √ √ √ √ √ 29 Jan Chairman Title Member Member Member Member (as of 6 October 2020) Ex- Member until May 2020 Mr. Fahad Abdullah Al Kassim Mr. member) (Independent, Savola Board Name Abdullah Al Kassim Mr.Fahad (Chairman) member) Board (Independent, Savola Name Mr. Aly Asim Barakat Mr. (Committee Secretary) Mr. Mohammed Ibrahim Al Issa Mohammed Mr. member) Board (Non-Executive, Savola Mohammed Ibrahim Al Issa Mr. member) (Non-Executive, Savola Board Bader Hamad Al Rabia Mr. member) (Independent , Savola Board Abdul Raouf Suliman Banaja Dr. (Independent, external member) Abdullah Al Garaawy Tareq Mr. (Independent, external member) Ammr Khaled Kurdi Dr. (Independent, external member) Dr. Ammr Khaled Kurdi Dr. (Independent, external member) Mr. Bader Hamad Al Rabia Mr. member) (Independent, Savola Board Dr. Abdul Raouf Suliman Banaja Dr. (Independent, external member) Mr. Tareq Abdullah Al Garaawy* Tareq Mr. (Independent, external member) Audit Committee attendance: for 2020 (SAR): Audit Committee remuneration 1 Sr. 1 as a member of the Audit Committee of the Board Abdullah Al Garaawy was appointed by the Group Tareq Note: * Mr. office term 6 October 2020 until the end of the current from (as an Independent external member) effective Savola Group 2022. The appointment of Mr of the Audit Committee, which ends on 30 September the Audit Committee as of 1 May 2020 due to his business commitments. from Ammr Kurdi of Dr. after the resignation Sr. - Total 2 2 3 4 5 Audit Committee until 1 May 2020: Ex-member of Savola Group - Ex-member of Savola Group Audit Committee until 1 May 2020: Ex-member of Savola Group - 3 4 5 5. is listed below Audit Committee held during the year 2020 members’ attendance for the meetings of the The Audit Committee 6. Experience Assumed several positions in a number of local and banks. regional Has more than 22 Has more years’ practical experience in financial, accountancy, compliance and consultancy gained working with from several banks such as, Saudi Investment Bank, Saudi British Bank and Bank Albilad. Has extensive experience in a number of including areas, accounting, auditing, financial management, corporate governance, and risk management. In addition, he is an Audit Committee member for several Joint Stock Companies. continued Bachelor's degree Bachelor's degree in Accounting King Fahad from University of and Petroleum Minerals in 2001. Master's degree Master's degree in Accounting from the University of Arizona, United States, 2004. Ph.D. in Accounting, University of North United Texas, States, 2010. Certified Management Accountant (CMA), and member of Global Board of of Directors the Institute of Management Accountants, United States. PhD in Economics, University of California,Santa Barbara, United States, 1981 degree - Bachelor’s in Accountancy from King Saud University in 1996. in degree - Master’s Accountancy from Washington George United University, States in 2002. - A Certified Management Accountant, and a member of the Institute of Management Accountants (USA) as well as a member of Institute of Internal Auditors. • • • • Qualifications Chief Financial Officer at Saudi Arabian Amiantit Company. Chief Audit Executive at King Fahd University & of Petroleum Minerals. Advisor to the Deputy Governor, the Saudi Arabian Monetary Agency (SAMA) Economic Ministry Advisor, of Finance in several Worked companies like Idfa Management & Financial Consultants, and Buildings Tatweer Company. • • Previous positions Previous Holds number of memberships and on boards committees such as Audit Committee member in Herfy and other Joint Stock Companies. He is currently He is currently a member of several joint stock companies’ Audit Committees. CEO of Business Services at Saudi Industrial Investment Co. (Dusar) Current positions Current Member name Rauf Abdul Dr. Suliman Banaja Mr. Tareq Tareq Mr. Abdullah Al Garaawy Dr. Ammr Dr. Khaled Kurdi No 4. 5. Ex-member of Savola Group Audit Committee until May 1, 2020: Ex-member of Savola Group - Savola Group Audit Committee Report Report Committee Audit Group Savola for the2020 31 December year ended Directors’ Report Directors’ The Savola Group Annual Report 2020 The Savola Group 112 OVERVIEW STRATEGIC REVIEW DIRECTORS’ REPORT FINANCIAL STATEMENTS 115 d of Directors issue its invitation. The meeting will be held d of Directors The Group’s External Auditors conducted their audit in accordance with international auditing standards adopted in Saudi Arabia adopted international with External auditing standards conducted their audit in accordance Auditors The Group’s of free are about whether the financial statements assurance that they plan and perform the audit to obtain reasonable which require year consolidated financial statements for the the Group’s an unqualified opinion on in providing This resulted material misstatement. 2020. ended on 31 December assurance was that reasonable Audit Committee believes the Group’s above mentioned procedures, of the Based on the results procedures. of internal control the effectiveness regarding provided we cannot conclude operations locally and regionally of the Group's spread we emphasize that due to the geographical However, on selecting random substance, rely in procedures as these procedures, of the internal control exclusively on the comprehensiveness above. samples as mentioned the continuously to develop and improve focused are and its subsidiaries, efforts at the Group the Audit Committees’, Accordingly and its subsidiaries. the Group review mechanism in place across procedures and efficiency of the internal control effectiveness Conclusion: and the charter of the requirements by the Audit Committee during the year 2020 in line with the regulatory was prepared This report Assembly when the Boar Committee and will be submitted to the General regulatory authorities). The Committee is glad to answer all by the dates approved to the during the first half of 2021 (according and meeting of shareholders, - during the General Assembly stated in this report - as inquiries and questions of the shareholders of success. ALLAH is the guardian e the Group operates. In e the Group manent, temporary and part-time), continued Internal control mechanisms and its results at the Group: mechanisms and its results Internal control Summary of Audit Committee duties, responsibilities and achievements executed in 2020 Summary of Audit Committee duties, responsibilities Savola Integrity Hotline Impact of COVID-19 Related party transactions Internal audit External audit Financial reporting Review the External Auditors service delivery plan, scope of work, the results of the financial audits, the relevant audit reports and relevant audit of the financial audits, the Review the External delivery plan, scope of work, the results Auditors service or comments to the audit findings. responses management letter together with management team to the External Executive Management Auditors and that no assistance was given by the Group’s that appropriate Ensure restrictions on the scope of activities or access to during the course of the audit, including any encountered difficulties were information. required party party transactions for 2020 included in the related of Savola related of External limited review Auditors Review the results the party transactions executed by to the related in relation of Directors by the Chairman of Board prepared transactions report if any. based on the results, to the Board any recommendation Company during the year and provide and audited financial statements. report of Directors disclosed in the Board properly party transactions are that related Ensure Review and approve the Group’s internal audit department charter, plan and outputs and ensure whether the function has the whether the plan and outputs and ensure internal audit department charter, the Group’s Review and approve to carry out its work while maintaining its independence. resources necessary authority and tracking and follow-up of implementation process and monitor the internal audit reports Group Review and assess Savola therein. the internal of audit recommendations taken in respect actions are determining or not appropriate whether Review and recommend to the Group’s Board of Directors the approval of the preliminary quarterly results and year-end and year-end quarterly results of the preliminary the approval Directors of Board the Group’s to Review and recommend changes in accounting reliability of the information therein, disclosed statements focusing particularly on the consolidated financial as well as compliance with of accounting estimates for significant issues, reasonableness significant and unusual events, policy, legal requirements. and other accounting standards response to that, the Audit Committee is closely monitoring any material impact on the continuity of business activities and operations to that, the Audit Committee is closely monitoring response and of material, availability of inventory, facilities, supply to production to any potential risks associated with interruptions relating to the adherence as well as ensure and timely response, management of an effective the Group’s safety of employees to ensure the outcome of COVID-19 the Audit Committee reviewed Further, authorities. imposed by the respective measures precautionary for the year ended 31 December 2020. results which had a limited impact on the Group’s consultants, suppliers and vendors. trainers, clients, individuals, agency staff, shareholders, responsibility for establishing and and its subsidiaries certifies on an annual basis their The Executive Management of the Group and efficiency of the effectiveness assurance regarding reasonable designed to provide procedures maintaining internal control reasonable assurance regulations. The compliance with applicable laws and reporting and of financial operations, the reliability completed by all heads of functions results of a questionnaire certifications is supported by the by the signed internal control provided published by Committee of Framework and subsidiaries designed in line with the Internal Control–Integrated the Group across handed over and certificates for 2020 were Commission. The signed internal control (COSO) of the Treadway Sponsoring Organization legal counsel. filed with the Group’s by the Audit Committee and its subsidiaries execute the annual audit plan approved The Internal Audit Department at the Group focusing on the assessment of the procedures and its subsidiaries to evaluate the existing condition of internal control at the Group of duties and information systems. A random segregation risks, policies and procedures, structure, organization’s environment, control and efficiency of internal is selected with the objective of testing the effectiveness sample of activities within the planned audit area the execution of annual audit plans are from resulting recommendations design and operation. All internal control procedures control communicated to concerned and its subsidiaries to management parties and followed-up by internal audit departments at the Group procedures. internal control support maintaining effective 8. f. matters raised by any and records "Integrity Hotline" which captures facility whistleblowing reporting Oversee the Savola Group (per stakeholders, including the Executive Management team, senior managers and employees e. World Health Organization (COVID-19) was confirmed by the in early 2020 which was characterized of novel coronavirus The spread businesses and economic activities in the geographies wher (WHO) as a pandemic causing disruptions to • d. • • • • c. b. • 7. a. • Savola Group Audit Committee Report Report Committee Audit Group Savola for the2020 31 December year ended Directors’ Report Directors’ The Savola Group Annual Report 2020 The Savola Group 114 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
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