Rights Issue Prospectus

Al Sagr Cooperative Insurance Company is a Saudi public joint stock company, incorporated pursuant to the Royal
Decree No. (M/11) dated 16/02/1428H (corresponding to 06/03/2007G) and Ministerial Resolution No. (63) dated

of Al Sagr Cooperative
15/02/1428H (corresponding to 05/03/2007G) and the License No. (TMN/13/20083) issued by the Saudi Central Bank
License dated 23/03/1429H (corresponding to 31/03/2008G) to carry out insurance activity in accordance with the
provisions of the Cooperative Insurance Companies Control Law and its Implementing Regulations.
The Company is registered before the commercial register in Al-Khobar under No. (2051036871) dated 22/03/1429H
(corresponding to 30/03/2008G).
Insurance Company
Offering sixteen million (16,000,000) ordinary shares at an Offer Price of ten (10) Saudi Riyals per share through a
Rights Issue with a total value of one hundred sixty million (160,000,000) Saudi Riyals, representing an increase by
approximately (114.29%) of the Company’s current capital, bringing the Company’s capital after the Rights Issue to
three hundred million (300,000,000) Saudi Riyals, divided into thirty million (30,000,000) ordinary shares.

starting on Tuesday 26/12/1445H (corresponding to 02/07/2024G) starting on Tuesday 26/12/1445H (corresponding to 02/07/2024G)
Trading Period and ending on Tuesday 03/01/1446H (corresponding to 09/07/2024G) Subscription Period and ending on Sunday 08/01/1446H (corresponding to 14/07/2024G)

Al Sagr Cooperative Insurance Company (hereinafter referred to as the “Company” or “Al Sagr”), is a Saudi public any) without any fees or deductions, among the eligible persons who have not exercised their right to subscribe in whole
joint stock company incorporated pursuant to the Royal Decree No. (M/11) dated 16/02/1428H (corresponding to or in part, as well as those entitled to fractional shares, each according to what he is entitled to no later than Monday
06/03/2007G) and Ministerial Resolution No. (63) dated 15/02/1428H (corresponding to 05/03/2007G) and the License 15/02/1446H (corresponding to 19/08/2024G).
No. (TMN/13/20083) dated 23/03/1429H (corresponding to 31/03/2008G) issued by the Saudi Central Bank to carry
In the event that Institutional Investors have not subscribed for all the Rump Shares and fractional shares (if any), then
out insurance activity in accordance with the provisions of the Cooperative Insurance Companies Control Law and
such shares shall be allocated to the Underwriter who will purchase them at the Offer Price (for more information, kindly
its Implementing Regulations. The Company is registered before the commercial register in Al-Khobar under No.
refer to Section 12 “Information Related to Shares and Terms and Conditions of the Offering”). The final allocation
(2051036871) dated 22/03/1429H (corresponding to 30/03/2008G). The Company's capital upon incorporation amounted
process will be announced no later than Tuesday 17/01/1446H (corresponding 23/07/2024G) (Allocation Date) (for more
to two hundred million (200,000,000) Saudi Riyals, divided into twenty million (20,000,000) shares at a nominal value
information, please refer to Section (12) “Information Related to Shares and Terms and Conditions of the Offering”).
of ten (10) Saudi Riyals per share. The Company's head office is located in Al-Khobar, first floor, ATCO Building, King
Khaled Street, Postal Code: Al-Khobar 31952, P.O Box 3501. Upon the completion of the Offering and Subscription processes, the Company’s share capital becomes three hundred
million (300,000,000) Saudi Riyals divided into thirty million (30,000,000) ordinary shares. The net proceeds of the
The current Capital of the Company is one hundred and forty million (140,000,000) Saudi Riyals divided into fourteen
Subscription will be mainly used to support the Company's future plans and to enhance the financial solvency margin (for
million (14,000,000) ordinary shares at a nominal value of ten (10) Saudi Riyals per share, all of which are fully paid shares
more information, kindly refer to Section (6) “Use of Offer Proceeds”).
(hereinafter referred to as the "Existing Shares"). The Substantial Shareholders who own more than 5% of the Company's
shares, are represented by one shareholder which is Al Sagr National Insurance Company (an Emirati public joint stock The Company’s shares are of one class and no share grants its holder any preferential right. The New Shares will be fully
company), owning (26%) of the Company’s shares. On 28/02/1445H (corresponding to 13/09/2023G), the Board of paid and rank identically with the Existing Shares. Each share entitles its holder to one vote, and each shareholder (the
Directors recommended to increase the Company’s capital through a Rights Issue with a total value of one hundred and “Shareholder”) has the right to attend the General Assembly’s meetings (referred to as the “General Assembly”) (whether
sixty million (160,000,000) Saudi Riyals to comply with the minimum required capital for insurance companies and to ordinary or extraordinary) and vote therein. Holders of the New Shares will be entitled to receive their portion of any
support the Company’s future plans, and enhance its financial solvency margin which is subject to the approval of the dividends, (if any), declared by the Company after their issuance date.
Saudi Central Bank, the Capital Market Authority (hereinafter referred to as the “Authority” or the “CMA”) and the Saudi On 03/02/1426H (corresponding to 10/02/2008G), all of the Company’s shares were registered and listed on the Saudi
Tadawul Group, in addition to the approval of the Extraordinary General Assembly (“EGA”). The Company has obtained Exchange with a capital of two hundred million (200,000,000) Saudi Riyals divided into twenty million (20,000,000)
the non-objection of the Insurance Authority with respect to the capital increase pursuant to letter No. (23-134) dated shares with a nominal value of ten (10) Saudi Riyals per share. On 26/06/1434H (corresponding to 06/05/2013G), the
26/05/1445H (corresponding to 10/12/2023G). EGA approved the increase of the Company’s capital by an amount of fifty million (50,000,000) Saudi Riyals by granting
On Wednesday 20/12/1445H (corresponding to 26/06/2024G), the Extraordinary General Assembly approved the one bonus share for every (4) outstanding shares, provided that the value of the capital increase is paid by transferring
Company’s capital increase through a Rights Issue provided that it consists of offering sixteen million (16,000,000) new an amount of fifty million (50,000,000) Saudi Riyals from retained earnings. Thus, the Company’s capital becomes two
ordinary shares (hereinafter referred to as “Rights Issue Shares” or “New Shares”) at an offer price of ten (10) Saudi hundred and fifty million (250,000,000) Saudi Riyals divided into twenty-five million (25,000,000) shares with a nominal
Riyals per share (hereinafter referred to as the “Offer Price”) and with a nominal value of ten (10) Saudi Riyals, in value of ten (10) Saudi Riyals per share, based on the recommendation of the Board of Directors dated on 20/04/1434H
order to increase the Company’s capital after the completion of the subscription process from one hundred and forty (corresponding to 02/03/2013G) and the non-objection of the Saudi Central Bank. On 16/11/1439H (corresponding to
million (140,000,000) Saudi Riyals to three hundred million (300,000,000) Saudi Riyals, i.e., an increase of approximately 29/07/2018G), the EGA approved the increase of the Company’s capital from two hundred and fifty million (250,000,000)
(114.29%) of the Company’s current capital. Saudi Riyals divided into twenty five million (25,000,000) shares with a nominal value of ten (10) Saudi Riyals per
share by an amount of one hundred fifty million (150,000,000) Saudi Riyals by granting (3) bonus shares for every
The Rights Issue will comprise tradable securities (collectively referred to as “Rights” and each as “Right”), to
(5) outstanding shares, provided that the capital increase is made by capitalizing the amount of one hundred and fifty
shareholders, as at the close of trading on the date of the EGA held for the capital increase, and who are registered in the
million (150,000,000) Saudi Riyals (i.e the amount of one hundred and nineteen million (119,000,000) Saudi Riyals
Company’s shareholders register at the Depository Center at the end of the second trading day following the day of the
from the retained earnings account and the amount of thirty-one million (31,000,000) Saudi Riyals from the statutory
EGA meeting approving the capital increase on Wednesday 20/12/1445H (corresponding to 26/06/2024G) (hereinafter
reserve). Hence, the Company’s capital becomes four hundred million (400,000,000) Saudi Riyals divided into forty
referred to as the “Eligibility Date”) (collectively referred to as “Registered Shareholders” and each as “Registered
million (40,000,000) shares with nominal value of (10) Saudi Riyals per share, based on the recommendation of the Board
Shareholder”), provided that such Rights will be deposited into the registered shareholders’ portfolios following the day
of Directors dated on 14/08/1439H (corresponding to 30/04/2018G) and the non-objection of the Saudi Central Bank.
of the EGA meeting approving the capital increase and taking into account the settlement procedures with about (1.1429)
On 05/02/1444H (corresponding to 01/09/2022G), the Board of Directors resolved to recommend to the EGA a capital
rights for each (1) share of the Company’s shares, and each Right entitles its holder to subscribe to one (1) new share at
reduction from four hundred million (400,000,000) Saudi Riyals divided into forty million (40,000,000) shares with a
the Offer Price.
nominal value of ten (10) Saudi Riyals per share to one hundred and forty million (140,000,000) Saudi Riyals divided into
Registered Shareholders and other investors (“New Investors”) who may trade in Rights and subscribe to New Shares fourteen million (14,000,000) shares with a nominal value of (10) Saudi Riyals per share, with a reduction rate of (65%)
will be able to trade and subscribe to the Rights Issue in the Saudi Stock Exchange (hereinafter referred to as “Tadawul” in order to restructure the Company’s capital and extinguish (100%) of the accumulated losses which reached (65%) of
or the “Exchange”) or they may not take any action regarding their Rights. The Trading Period and Subscription Period the capital, by canceling twenty-six million (26,000,000) of the Company’s shares. On 24/02/1444H (corresponding to
shall commence after (3) working days after the EGA meeting approving the capital increase on Tuesday 26/12/1445H 20/09/2022G), the Company received the Saudi Central Bank’s letter No. (44015739) approving the capital to reduction
(corresponding to 02/07/2024G), provided that the Trading Period ends on Tuesday 03/01/1446H (corresponding by two hundred and sixty million (260,000,000) Saudi Riyals, so that the capital becomes one hundred and forty million
to 09/07/2024G) (the “Trading Period”) while the subscription period will continue until Sunday 08/01/1446H (140,000,000) Saudi Riyals divided into fourteen million (14,000,000) shares with a nominal value of ten (10) Saudi
(corresponding to 14/07/2024G) (“Subscription Period”). Riyals per share. The Company then submitted a file to the Capital Market Authority (CMA) to request its approval on the
capital reduction on 25/02/1444H (corresponding to 21/09/2022G) which was obtained on 09/03/1444H (corresponding to
It should be noted that the Trading Period and Subscription Period will start on the same day, while the Trading Period
05/10/2022G). On 17/03/1444H (corresponding to 13/10/2022G), the EGA also approved the reduction of the Company’s
continues until the end of the sixth day from the beginning of the period, the Subscription Period will continue until the
capital from four hundred million (400,000,000) Saudi Riyals divided into forty million (40,000,000) shares with a
end of the ninth day from the beginning of the same period.
nominal value of ten (10) Saudi Riyals per share to one hundred and forty million (140,000,000) Saudi Riyals divided
Registered Shareholders will be able to trade the Rights during the Trading Period, by selling the acquired Rights or to fourteen million (14,000,000) shares with a nominal value of ten (10) Saudi Riyals per share, i.e., a reduction of two
part thereof, or purchasing additional Rights through the Saudi Stock Exchange. They have also the option not to take hundred and sixty million (260,000,000) Saudi Riyals.
any action regarding their shares. New Investors will be able, during the Trading Period, to purchase Rights through the
The Company's Existing Shares are currently traded on the Saudi Stock Exchange Market (“Saudi Tadawul” or the
Exchange and sell the purchased Rights during the Trading Period.
“Market”). The Company has submitted a request to the Capital Market Authority in the Kingdom of Saudi Arabia
Subscription to New Shares will be available during the Subscription Period at one phase as follows: (the “CMA” or the “Authority”) to register and offer the New Shares and has also submitted a request to the Saudi
1. During such period, all Registered Shareholders and New Investors are entitled to subscribe to the New Shares. Stock Exchange Group (“Tadawul”) to accept their listing. All the required documents have been submitted, meeting all
relevant regulatory requirements and the approvals have been obtained for the offering and listing process including the
2. The Registered Shareholder may during the Subscription Period directly subscribe for the New Shares prorated to publications of the present Prospectus.
its own shares. In case the Registered Shareholder purchases new rights, he or she will be allowed to subscribe for
them after the end of the settlement period (two business days). Trading in New Shares on Tadawul is expected to start upon the final allocation of the New Shares and the refunding of the
surplus (for more information, kindly refer to page (xiv) “Key Dates and Subscription Procedures”). Trading in the New
3. The New Investors are entitled to subscribe to the New Shares after the end of the settlement period (two business Shares will be permitted, upon their registration and listing, to Saudi citizens, non-Saudi nationals holding valid residence
days). permits, GCC nationals (the Cooperation Council), as well as Saudi and GCC companies, banks, institutions, investment
4. Subscription will be available electronically through the investment portfolio on the trading platforms and funds, and to Foreign Investors that are qualified as per the rules regulating foreign investment in securities. Furthermore,
applications through which sale and purchase orders are entered, in addition to subscription through other channels other categories of foreign investors will be entitled to acquire the economic benefits associated with the new shares by
and means available to the agent. entering into swap agreements with persons authorized by the CMA (the “Authorized Persons”), knowing that in such
case, the Authorized Person will be the legal owner who register the Shares.
In the event that Shares remain unsubscribed after the end of the Subscription Period (the “Rump Shares”), they will
be offered to a number of institutional investors (hereinafter referred to as “Institutional Investors”) (this Offering This Prospectus must be read in its entirety and the “Important Notice” section on page (i) and Section (2) “Risk Factors”
is referred to as the “Rump Offering” and the price at which theses shares are offered as “Rump Offering Price”). as provided herein has to be considered carefully prior to making any decision to invest in the Rights or New Shares
These institutional investors can submit purchase offers for the Rump Shares provided that the quoted price by any of offered hereunder.
the Institutional Investors doesn’t fall below the Offer Price. Offers will be accepted starting (10:00) am on Wednesday The offering of the new ordinary shares under this Prospectus is contingent on the Shareholders’ approval to increase the
11/01/1446H (corresponding to 17/07/2024G) until (5:00) pm on Thursday 12/01/1446H (corresponding to 18/07/2024G) capital in accordance with the recommendation of the Board of Directors and the Company obtaining regulatory approvals.
(“Rump Offering Period”). Rump shares will be allocated to the Institutional Investors with the highest bid, to the lowest An invitation to the Extraordinary General Assembly of the Company to approve the increase of the Company’s capital by
allocated (provided that the price isn’t below the Offer Price) provided that Rump Shares are proportionally allocated issuing Rights Shares Issue has been published on Tuesday 27/11/1445H (corresponding to 04/06/2024). The Shareholders
among Institutional Investors that tendered offers at the same price. As for the fractional shares (if any), they will be shall note that if the Shareholders’ approval is not obtained for the offering of the increase of the Company’s capital by
added to the Rump Shares and treated the same way. All proceeds resulting from the Rump Offering shall be allocated to issuing Rights Shares Issue, the issuance of Rights Shares Issue shall be automatically ceased. Thereupon, this Prospectus
the Company and the rest of the proceeds and fractional shares (if any) will be distributed (in excess of the Offer Price, if shall be null and void and Shareholders shall be notified accordingly.

Financial Advisor, Lead Manager and Underwriter

This prospectus includes information provided as part of the application for registration and offer of securities in compliance with the Rules on the Offer of Securities and Continuing Obligations of the Capital Market
Authority of the Kingdom of Saudi Arabia (the “Authority”) and the application for listing of securities in compliance with the Listing Rules of the Saudi Stock Exchange Company. The directors, whose names appear in this
prospectus, collectively and individually accept full responsibility for the accuracy of the information contained in this prospectus and confirm, having made all reasonable enquiries, that to the best of their knowledge and
belief, there are no other facts the omission of which would make any statement herein misleading. The Authority and the Saudi Stock Exchange Company do not take any responsibility for the contents of this prospectus, do
not make any representation as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this prospectus.
This Prospectus is issued on 15/10/1445H (corresponding to 24/04/2024G).
This unofficial English language translation of the official Arabic language Prospectus is provided for information purposes only. The Arabic language Prospectus published on the CMA’s website (www.cma.org.sa) remains
the only official, legally binding version and shall prevail in the event of any conflict between the two texts.
 ً
‫ ﻧﺘﻘﺪم‬،‫ﻣﻌﺎ‬
Together, We Advance
www.alsagr.com
Important Notice
This Prospectus (the “Prospectus”) provides detailed information pertaining to Al Sagr Cooperative Insurance Company and the Rights Issue
shares offered for subscription. When applying to subscribe for New Shares, investors will be treated on the basis that their applications are
based on the information provided in this Prospectus, a copy of which can be obtained from the Company’s headquarters and from the Lead
Manager, or by visiting the websites of the Company (www.alsagr.com), the Financial Advisor (www.albilad-capital.com), and the Capital
Market Authority (www.cma.org.sa).

This Prospectus will be published and ensured to be available to the public within a period not less than (14) days prior to the date of the EGA’s
meeting for the capital increase. In the event that EGA does not approve the capital increase within six (6) months from the date of CMA’s
approval on registering and offering the Rights Issue, such approval will be deemed void.

The Company has appointed Albilad Investment Company “Albilad Capital” as a financial advisor (“Financial Advisor”), lead manager
(“Lead Manager”), and underwriter (“Underwriter”), with respect to the Rights Issue shares’ Offering aiming to increase the Company’s
capital pursuant to this Prospectus.

This Prospectus contains information provided according to the requirements of the Rules on the Offer of Securities and Continuing Obligations
issued by the CMA’s Board pursuant to Resolution No. (3-123-2017), dated 09/04/1439H (corresponding to 27/12/2017G), based on the
Capital Market Law issued by Royal Decree No. (M/30), dated 02/06/1424H (corresponding to 31/07/2003G), amended by CMA Board
Resolution No. (8-5-2023), and dated 25/06/1444H (corresponding to 18/01/2023G). The Board members, whose names appear on page (iv)
of this Prospectus, collectively and individually, bear full responsibility for the accuracy of the information provided in this Prospectus, and
confirm, having made all reasonable enquiries that to the best of their knowledge and belief, that there are no other facts, the omission of which
would make any statement herein misleading. The CMA and Tadawul do not assume any responsibility for the content of this Prospectus, do
not provide any confirmation regarding its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss arising from,
or incurred in reliance upon, any part of this Prospectus.

Despite that the Company has made all reasonable enquiries to ensure the accuracy of information provided in this Prospectus as at its issuance
date, a significant part of the information included in this prospectus is derived from external sources. Whereas none of the Company, its Board
Directors, Financial Advisor or any of its Advisors whose names appear on pages (vii) and (viii) of this Prospectus have an evident reason to
doubt the accuracy of this information, it is important to note that such information has not been independently verified, and no representation
is made as to the accuracy and completeness of any of this information.

The information provided in the Prospectus as at the date hereof is subject to amendment. In particular, the actual financial status of the
Company and the value of the Offer Shares may be adversely affected by future developments such as inflation, interest rates, taxes, or other
economic and political factors or other factors beyond the Company’s control (for more information, kindly refer to Section 2 “Risk Factors”
of this Prospectus). Neither the delivery of this Prospectus nor any oral, written information or printed interaction in relation to the Offer Shares
is intended to be, nor should be construed as or relied upon in any way as, a promise or a confirmation on future earnings, results or events.

This Prospectus may not be considered as a recommendation from the Company or its Board members or any of the Company’s Advisors in
the process for subscription of Rights Issue. Moreover, the information provided in this Prospectus is of a general nature and prepared without
taking into account individual investment objectives, financial situation or special investment needs. Each recipient of this Prospectus, prior to
making an investment decision, has to obtain professional advice from a financial advisor licensed by the CMA regarding the Subscription in
order to assess the suitability of this investment and the information provided in this Prospectus with respect to his objectives, conditions and
financial needs.

Registered Shareholders and other investors - “New Investors” - who may trade rights and subscribe to new shares - will be able to trade and
subscribe to rights shares on the Saudi Tadawul “Tadawul” or “Market”. The Trading Period and the Subscription Period begin three (3)
days after the approval of the Extraordinary General Assembly, which includes the approval of the capital increase, on Tuesday 26/12/1445H
(corresponding to 02/07/2024G), and the trading period ends. On the day Tuesday 03/01/1446H (corresponding to 09/07/2024G) “Trading
Period”, while the subscription period continues until the end of the day Sunday 08/01/1446H (corresponding to 14/07/2024G) “Subscription
Period”.

It should be noted that the Trading Period and the Subscription Period will begin on the same day, the Trading Period will continue until the end
of the sixth day from the beginning of the period, while the Subscription Period will continue until the end of the ninth day from the beginning
of the same period.

The Registered Shareholders will be able to trade the Rights Issue during the Trading Period, by selling acquired Rights or part thereof or
buying additional Rights through the Exchange. New Investors will also be able to buy and sell Rights through the Exchange or subscribe to
them during the Trading Period.

Subscription to the New Shares will be available during the Subscription Period at one phase as follows:

1. During such period, all Registered Shareholders and New Investors are entitled to subscribe to the New Shares.
2. The Registered Shareholder may during the Subscription Period directly subscribe for the New Shares prorated to its own shares. In
case the Registered Shareholder purchases new rights, he or she will be allowed to subscribe for them after the end of the settlement
period (two business days).
3. The New Investors are entitled to subscribe to the New Shares after the end of the settlement period (two business days).
4. Subscription will be available electronically through the investment portfolio on the trading platforms and applications through which
sale and purchase orders are entered, in addition to subscription through other channels and means available to the agent.

i
In the event that any shares remain unsubscribed after the Subscription Period (the “Rump Shares”), theses shares will be offered to a number
of institutional investors (“Institutional Investors”); (this offering is referred to as the “Rump offering”).

Institutional Investors shall submit their offers to purchase Rump Shares. Receipt of such offers will start at [10] AM on Wednesday 11/01/1446H
(corresponding to 17/07/2024G) until [5] PM on Thursday 12/01/1446H (corresponding to 18/07/2024G) (the “Rump Offering Period”).
Rump Shares will be allocated to the Institutional Investors with the highest bid, to the lowest (provided that it is not below the Offer Price).
These shares will be allocated on a pro rata basis (proportionally) to the Institutional Investors submitting the same offer.

As for fractional shares, they will be added to the Rump Shares and be treated similarly, and the total Offer Price of the Rump Shares will be paid
to the Company and the remaining of the proceeds from the sale of those Rump Shares (exceeding the Offer Price, if any) will be distributed,
without any fees or deductions, to the Eligible Persons, each according to what he may be entitled to no later than Monday 15/02/1446H
(corresponding to 19/08/2024G). In the event that Institutional Investors have not subscribed to all the Rump Shares and Fractional Shares,
Rump Shares will be allocated to the Underwriter who will purchase them at the Offer Price (for more information, kindly refer to Section
12 “Information Related to Shares and Terms and Conditions of the Offering”). The final allocation of the New Shares will be announced
no later than Tuesday 17/01/1446H (corresponding 23/07/2024G) (the “Allocation Date”) (for more information, kindly refer to Section 12
“Information Related to Shares and Terms and Conditions of the Offering”).

The offering of Rights issue Shares by means of this Prospectus is subject to the approval of shareholders, and the issuance of such shares has
been approved by the EGA of the Company held on Wednesday 20/12/1445H (corresponding to 26/06/2024G).

The convening quorum of the EGA meeting requires the presence of shareholders representing at least half of the Company’s capital. If the
required quorum is not met then either: (1) A call for a second meeting shall be sent and the invitation for the General Assembly published
at least twenty-one (21) days prior the meeting date along with the agenda. The invitation may be sent to all shareholders through registered
letters only; Or (2) the second meeting shall be held one hour after the expiration of the specified period for the first meeting, provided that the
invitation for the first meeting indicates the possibility of holding this meeting. The second meeting will be valid if attended by shareholders
representing at least a quarter of the capital. If the required quorum is still not met in the second meeting, an invitation will be sent for a third
meeting to be held under the same conditions, and the third meeting will be valid regardless the number of shares represented therein, upon
the approval of competent authorities. Recipients of this Prospectus must also be aware of all legal and regulatory restrictions related to this
Subscription and sale of New Shares, and must comply with them.

ii
Sector and Market information
The information and data related to Saudi economy, the insurance sector, and market data provided in this Prospectus have been obtained from
various sources. While there is no reason to believe that this information lacks accuracy fundamentally, the Board members, Shareholders and
Advisors have not independently verified the accuracy of such information and data. Consequently, a clear affirmation regarding the accuracy
and completeness of this information cannot be provided.

Financial Information
The audited financial statements for the year ended on December 31, 2020G were audited by PricewaterhouseCoopers (PwC) Certified
Public Accountants and Ibrahim Ahmed Al Bassam & Co. Certified Public Accountants. As for the audited financial statements for the years
ended on December 31, 2021G and 2022G and the interim condensed financial information for the nine-month period ending on September
30, 2023G (unaudited), they have been prepared by PricewaterhouseCoopers (PwC) Certified Public Accountants and Al-Kharashi & Co.
Certified Accountants and Auditors. The financial statements for the fiscal years 2020G, 2021G, and 2022G, the interim condensed financial
information for the nine-month period ending on September 30, 2023G, and the notes attached thereto have been prepared in accordance with
the International Financial Reporting Standards (IFRS) applicable in the Kingdom of Saudi Arabia and other standards adopted by Saudi
Organization for Chartered and Professional Accountants (“SOCPA”).

The Company issues its financial statements in Saudi Riyals. Some financial and statistical information provided in this Prospectus has been
rounded off to the nearest integer. Therefore, if figures contained in the tables are added up, their total may not match with those mentioned in
the Prospectus.

Forecasts and Forward-Looking Statements

The forecasts set forth in this Prospectus have been prepared on the basis of specific and declared assumptions and future operating conditions
may differ from the assumptions used. Therefore, no affirmation or guarantee can be made with respect to the accuracy or completeness of
any of these forecasts. Some of the forecasts in this Prospectus are “forward-looking statements.” Such forecasts can generally be identified
by the use of words such as “plans,” “determines,” “intends,” “estimates,” “expects,” “is expected,” “may,” “possibly,” “will,” “would be” or
the negative thereof or other variations of such terms or comparable terminology. These forward-looking statements reflect the current views
of the Company with respect to future events but are not a guarantee of future performance. Many factors can impact the actual performance,
achievements or results of the Company and lead to significantly differences from what was explicitly or implicitly expressed in the mentioned
forward-looking statement. Some of the risks and factors that may lead to such impact are detailed in Section (2) of this Prospectus. Should any
one or more of these risk factors or uncertainties materialize or any underlying assumptions prove to be inaccurate or incorrect, the Company’s
actual results may vary substantially from those described in this Prospectus.

In compliance with the requirements of article (49) of the Rules on the Offer of Securities and Continuing Obligations, the Company commits
to submit a supplementary Prospectus to the Capital Market Authority if at any time after the publication of this Prospectus and before the
completion of the offering, the Company becomes aware that: (1) there has been a significant change in material matters contained in the
Prospectus or; (2) additional significant matters have become known which would have been required to be included in the Prospectus. Except
in the aforementioned circumstances, the Company does not intend to update or amend any information provided in this Prospectus, pertaining
to the industry, market, forward-looking statements whether as a result of new information, future events or otherwise. As a result of the
foregoing and other risks, uncertainties and assumptions, expectations for future events and circumstances set out in this Prospectus may not
occur as expected by the Company or may not occur at all. Eligible Persons should examine all forward-looking statements in the light of these
explanations and not rely primarily on these forward-looking statements.

iii
Company’s Directory
Board of Directors (BOD) – Current Session*

Indirect
Membership Status Direct Ownership
Ownership

Date of Appointment

Representation
Nationality

Number of Shares

Number of Shares
non-independent
Independent /

non-executive
Name Position Age

Ownership

Ownership
Percentage

Percentage
Executive /
09/05/1445H
Chairman of Non-
1. Saud Saleh Alarifi Saudi 69 Independent (corresponding to Himself - - - -
the Board Executive
23/11/2023G)

Vice 09/05/1445H
Non-
2. Naif Rashed Alarfaj Chairman of Saudi 34 Independent (corresponding to Himself - - - -
Executive
the Board 23/11/2023G)

Al Sagr
09/05/1445H
Sultan Abdulaziz Board Non- Non- National
3. Saudi 34 (corresponding to - - - -
Alsuwaidi Member Independent Executive Insurance
23/11/2023G)
Company

09/05/1445H
Yasser Mohammed Managing Non-
4. Saudi 53 Executive (corresponding to Himself 1,000 0.0071429% - -
Alharbi Director Independent
23/11/2023G)

Al Sagr
09/05/1445H
Abdel Board Non- Non- National
5. Canadian 51 (corresponding to - - - -
Muhsen Nafez Jaber Member Independent Executive Insurance
23/11/2023G)
Company

09/05/1445H
Abdullah Sulaiman Board Non-
6. Saudi 44 Independent (corresponding to Himself - - - -
Alhendi Member Executive
23/11/2023G)

09/05/1445H
Mohamed Board Non-
7. Saudi 72 Independent (corresponding to Himself 100 0.0007143% - -
Abdulaziz Alnuaim Member Executive
23/11/2023G)

09/05/1445H
Sami Ahmed Board Non-
8. Saudi 36 Independent (corresponding to Himself - - - -
Albabtin Member Executive
23/11/2023G)

09/05/1445H
Ahmed Khader Board Non-
9. Saudi 32 Independent (corresponding to Himself - - - -
Albaqshi Member Executive
23/11/2023G)
Source: The Company
*
On 08/05/1445H (corresponding to 22/11/2023G), the Ordinary General Assembly approved the election of the Board members for the current session, starting from 09/05/1445H
(corresponding to 23/11/2023G) for a period of three (3) years ending on 12/06/1448H (corresponding to 22/11/2026G). On 11/06/1445H (corresponding to 24/12/2023G), the Board of
Directors resolved to appoint Mr. Saud Saleh Alarifi as Chairman of the Board of Directors and Mr. Naif Rashed Alarfaj as Vice Chairman. The Company obtained the no objection of
the Insurance Authority on 11/06/1445H (corresponding to 24/12/2023G).
The Company is in compliance with the Companies Law and the Corporate Governance Regulations issued by the Board of Directors of the Capital Market Authority and the Corporate
Governance Regulations for Insurance Companies issued by the Saudi Central Bank with regard to the composition of the Board of Directors, as the Company’s Bylaws stipulates that
the Company shall be managed by nine (9) Board members elected by the Ordinary General Assembly for a period not exceeding three (3) years. The Company is also in compliance
with provisions of Article (16) of the Corporate Governance Regulations, which states that the majority of the Board members shall be nonexecutive members and that independent
members shall not be less than two or shall constitute one-third of the Board members (whichever is more). Therefore, the Company is in compliance with Clause (54) of the Insurance
Companies Governance Regulations, so its Board of Directors currently consists of nine (9) members, including (6) non-executive independent members.
It should be noted that the issues affecting the independence according to the Insurance Corporate Governance Regulations, include the following:
(1) Being a significant shareholder in the Company or in a related company, working for or representing a significant shareholder.
(2) Being a member of the Board in a related company or one of its subsidiaries, or having been one during the past two years.
(3) Being a member of the Board of the Company for more than nine years.
(4) Holding Senior Management position in the Company, or in a related company, or having held one during the past two years.
(5) Being an employee with the Company, with a related company, or with a company that provides services to the Company (e.g., external auditors,
consulting firms, etc.), or having worked with anyone of the above during the past two years.
(6) Being a related person of a member of the Board or senior management of the Company or of a related company.
(7) Having a contractual or business relationship with the Company (either directly or through an entity in which he or she is a significant shareholder, a
board member, or a manager) which resulted in paying to, or receiving from, the Company the equivalent of two hundred and fifty thousand (250,000)
Saudi riyal or more (other than his remuneration as a director of the Board and amounts related to insurance contracts) during the past two (2) years.
(8) Being under any financial obligation towards the Company or any members of its Board or senior management that might limit the exercise of
independence in judgment and decision making.
Issues affecting the independence mentioned in the Corporate Governance Regulations issued by the Board of the Capital Market Authority are also enumerated for example:
(1) if he holds (5%) or more of the shares of the Company or any other company within its group; or is a relative of who owns such percentages.
(2) if he is a relative of any member of the Board of the Company, or any other company within the Company’s group.
(3) if he is a relative of any Senior Executive of the Company, or of any other company within the Company’s group.
(4) if he is a Board member of any company within the group of the Company for which which he is nominated to be a board member.

iv
(5) if he is an employee or used to be an employee, during the preceding two years, of the Company or a company within its group, or if he held a controlling
interest in the Company or any party dealing with the Company or any company within its group, such as external auditors or main suppliers during the
preceding two years.
(6) if he has a direct or indirect interest in the businesses and contracts executed for the Company’s account.
(7) if the member of the Board receives financial consideration from the Company in addition to the remuneration for his membership of the Board or any
of its committees exceeding an amount of (SAR 200,000) or (50%) of his remuneration of the last year for the membership of the board or any of its
committees, whichever is less.
(8) if he engages in a business where he competes with the Company, or conducting businesses in any of the company’s activities.
(9) if he served for more than nine years, consecutive or inconsecutive, as a Board member of the Company (such became mandatory starting from the
session of the Board of Directors of the listed joint-stock company that will be after 01/01/2019G).

v
Company’s Address and Representatives
Company Address

Al Sagr Cooperative Insurance Company

Dammam area, first floor, ATCO building,
King Khalid Street, Postal Code: Al Khobar 31952, P.O. box 3501,
Kingdom of Saudi Arabia
Phone Number: 920001043
Fax Number: 00966 (13) 8302296
Website:www.alsagr.com
E-mail:[email protected]

Company’s First Authorized Representative Company’s Second Authorized Representative

Name: Yasser Mohammed Alharbi Name: Saud Saleh Ibrahim Alarifi

Position: Managing Director Position: Chairman of the Board of Directors

Address: Riyadh P.O. Box. 27045 Code 11417 Address: Riyadh P.O. Box. 300563 Code 11372

Phone number: 00966 (13) 8369555 (Ext: 777) Phone number: 00966 (13) 8369555 (Ext: 1001)

Fax number: 00966 (13) 8302296 Fax number: 00966 (13) 8302296

E-mail: [email protected] E-mail: [email protected]

Website: www.alsagr.com

Stock Market

Saudi Exchange (Tadawul)

King Fahd Road - Olaya 6897
Unit No.: 15
Riyadh 3388-12211
Kingdom of Saudi Arabia
Phone: +966 (11) 920001919
Fax: +966 (11) 2189133
Website: www.saudiexchange.sa
E-mail: [email protected]

vi
Advisors
Financial Advisor, Lead Manager and Underwriter

Al Bilad Capital
Riyadh - Olaya district
King Fahd Road - P.O. Box 140, Riyadh 11411
Kingdom of Saudi Arabia
Phone Number: +966 (11) 920003636
Fax: +966 (11) 2906299
Website: www.albilad-capital.com
E-mail: [email protected]

Legal Advisor

KLA & Company (Khaligyoun Legal Advisors)

Tower M7 - Eighth Floor
As Sahafah district - King Fahd Road -
P.O. Box 6118, Riyadh 11321
Kingdom of Saudi Arabia
Phone Number: +966 (11) 2637458
Website: www.klafirm.com
E-mail: [email protected]

Auditors

The Company’s Auditor for the fiscal years ended on December 31, 2020G, 2021G and 2022G,
and the financial period ending on September 30, 2023G

Price Waterhouse Chartered Accountants

Al Hugayet Tower – P.O. Box 467
Dhahran Airport 31932
Kingdom of Saudi Arabia
Phone Number: +966 (13) 8496311
Fax: +966 13 8496281
Website: www.pwc.com/middle-east
E-mail: [email protected]

The Company’s Auditor for the fiscal year ending on December 31, 2020G

Ibrahim Ahmed Al Bassam & Co. Certified Public Accountants

Building No. 4217 - Tahlia Street
Sulaymaniyah Center - P.O. Box 69658
Riyadh, Kingdom of Saudi Arabia
Phone Number: +966 (11) 2065333
Fax: +966 (11) 0265444
Website: www.pkfalbassam.com
E-mail: [email protected]

The Company’s Auditor for the fiscal year ending on December 31, 2021G and 2022G, and the financial period ending on September 30, 2023G

AlKharashi & Co. Certified Accountants and Auditors

7425 – Sahab Tower
Al-Takhasosi Street - Riyadh
Kingdom of Saudi Arabia
Phone Number: +966 9200 28229
Fax: +966 (11) 477 4924
Website: www.mazars.sa
E-mail: [email protected]

vii
 Actuarial Consultant

Actuarial Consultant for the Year 2023G

Badri Management Consultancy (Global Actuarial Consulting Firm)

Office 36 - King Abdul Aziz Road
Al Rabie District - Riyadh 13315
Kingdom of Saudi Arabia
Phone Number: 011 232 4112
Website: www.badriconsultancy.com
E-mail: [email protected]

Actuarial Consultant for the Years 2021G and 2022G

United Co. for Actuarial Services (CAIS)

Riyadh, Al Rabie District, Prince Mohammed bin Salman Road
Kingdom of Saudi Arabia
Phone Number: 011 2005784
Website: www.cais.com.sa
E-mail: [email protected]

Actuarial Advisor for the year 2020G

SHMA CONSULTING
AU-23-E Gold Tower
(AU) Plot No. JLT-PH1-I3 – Jumeirah Lakes Towers
P.O. Box 338526 - Dubai
The United Arab Emirates
Website: www.shmaconsulting.com
E-mail: [email protected]

Note: All of the aforementioned Advisors/auditors have given and not withdrawn, as of the date of this Prospectus, their written consent to the
publication of their names, logos and statements as set forth in this Prospectus. Neither the Advisors nor the auditors or any of their employees
or relatives hold any shares or any interest of any kind in the Company as of the date of this Prospectus.

viii
Offer Summary
This offering summary is intended to provide a brief overview of the information provided in this Prospectus. Therefore, this summary does not
contain all information that may be of interest to shareholders and other institutional and individual investors, therefore the offering summary
information is not sufficient to make an investment decision. Accordingly, recipients of this Prospectus will have to entirely read it before
making their decision whether to subscribe to shares or trade in rights issue shares. On a special note, it is deemed necessary to comply with
the provisions of section (2) “Risk Factors” of this Prospectus.

Below is a summary of the Offering:

Al Sagr Cooperative Insurance Company is a Saudi public joint stock company, established pursuant to the Royal Decree
No. (M/11) dated 16/02/1428H (corresponding to 06/03/2007G) and Ministerial Resolution No. (63) dated 15/02/1428H
Issuer’s Name,
(corresponding to 03 /05/2007G) and the License No. (TMN/13/20083) dated 23/03/1429H (corresponding to 31/03/2008G)
Description and
issued by the Saudi Central Bank to carry out insurance activity in accordance with the provisions of the Cooperative Insurance
Information of its
Companies Control Law and its Implementing Regulations. The Company is registered before the commercial register in Al-
Incorporation
Khobar under No. (2051036871) dated 22/03/1429H (corresponding to 30/03/2008G) (for more information about the Company
and its establishment, kindly refer to Section 3 “Company Overview and Nature of Business”)
The Company’s activities, according to the Commercial Registration Certificate are: health insurance, general insurance.
According to Article (3) of the Bylaws, the Company carries out cooperative insurance business and all related activities to,
including reinsurance, agencies, representation, correspondence, or mediation. The Company may also carry out all works
Issuer’s Business deemed necessary to achieve its purposes, whether in the field of insurance or investment of its funds, and to own and move
Activities fixed and cash assets, sells, exchanges, or leases them directly or through other companies it establishes or purchases with other
parties. The Company carries out its activities in accordance with the Cooperative Insurance Companies Control Law and its
Implementing Regulations, the provisions issued by SAMA, as well as the regulations and rules in effect in the Kingdom of Saudi
Arabia after obtaining the necessary licenses from the competent authorities, if any.

Number of Ownership
Founding Shareholders Nationality Book Value
Shares Percentage

Al Sagr National Insurance Company Emirati 5,200,000 52,000,000 26.00%

Redland Industrial Services (Arabia) Ltd (RISAL) Saudi 1,000,000 10,000,000 5.00%
Abdullah Rashid AL Rashid & Sons Company Saudi 1,000,000 10,000,000 5.00%
Mahmoud Mohamed Nashar Holding Company Saudi 600,000 6,000,000 3.00%
Al Turki Medical Group Company Saudi 600,000 6,000,000 3.00%
Khaled Al-Falih Abdulaziz Al-Sadoun Saudi 400,000 4,000,000 2.00%
Abdulrahman Hassan Abbas Sharbatly Saudi 400,000 4,000,000 2.00%
Alfanar Company Saudi 400,000 4,000,000 2.00%
Al Mozoon Architectural Contracting Group owned by
Saudi 400,000 4,000,000 2.00%
Faisal bin Saud bin Mohammed Al Saud
Founding Shareholders Amwal Al Khaleej for Maritime Investment Company Saudi 400,000 4,000,000 2.00%
Khaled Abdul Latif Al Fawzan Saudi 220,000 2,200,000 1.10%
Sumam Trading Est owned by Abdulaziz Ahmed
Saudi 200,000 2,000,000 1.00%
Mohammed Zaidan
The Saudi Trading and Maintenance Services
Saudi 200,000 2,000,000 1.00%
Corporation owned by Nabil Ahmed Akbar Ali Reda
Abdul Latif Ahmed Al Fawzan & Sons Co. Saudi 180,000 1,800,000 0.90%
Shihab Fahd Hasan Shobokshi Saudi 136,000 1,360,000 0.68%
Shadi Fahd Hasan Shobokshi Saudi 132,000 1,320,000 0.66%
Shaima Fahd Hasan Shobokshi Saudi 132,000 1,320,000 0.66%
Total Founding Shareholders 11,600,000 116,000,000 58.00%
The Public 8,400,000 84,000,000 42.00%
Total 20,000,000 200,000,000 100.00%

Substantial Shareholders,
the number of their Shareholders whose ownership percentage exceeds (5%) of the Company’s shares. As of the date of this Prospectus, the Company
shares and their has one substantial shareholder which is Al Sagr National Insurance Company (an Emirati public joint stock company), which
ownership percentages owns three million six hundred and forty thousand (3,640,000) shares that represent (26%) of the Company’s shares.
before the Offering

ix
 Means in the Rules of the Offering of Securities and Continuing Obligations, persons other than the following:
1. Affiliates of the issuer;
2. Substantial shareholders of the issuer;
3. Directors and senior executives of the issuer;
The Public 4. Directors and senior executives of the issuer’s affiliates;
5. Directors and senior executives of substantial shareholders of the issuer;
6. Any relatives of persons described at (1), (2), (3), (4) or (5) above;
7. Any company controlled by any persons described at (1), (2), (3), (4), (5) or (6) above.
8. Persons acting in concert, with a collective shareholding of (5%) or more of the class of shares to be listed.

Nature of the Offer Capital increase through the issuance of Rights Shares.

The net proceeds from the subscription will be mainly used to support the Company’s operations and enhance its financial
Purpose of the issuance solvency margin to comply with the solvency margin requirements imposed by the Central Bank on insurance companies
of the proposed Rights operating in the KSA. Such will be done through using the subscription proceeds to (increase the statutory deposit, invest in debt
Shares instruments, increase bank deposits, replacing the technical system for insurance and financial operations) (for more information,
kindly refer to Section (6) “Use of Offer Proceeds”).
Total proceeds from subscription for Rights Shares are expected to reach one hundred and sixty million (160,000,000) Saudi
Riyals. After deducting all Offering expenses, the Net Offer Proceeds will be used to support the Company’s future plans and
enhance its financial margin solvency. Shareholders will not receive any of the Offer Proceeds (for more information, kindly refer
to Section (6) “Use of Offer Proceeds”).
The following table outlines the suggested use of the Offer Proceeds:

Value Percentage* of the Total Offer

Statement
Total proceeds expected (Million Saudi Riyals) Proceeds (%)
to be Raised and a
Increase of Statutory Deposit 9 5.6%
detailed breakdown
and description of the Investment in Debt Instruments 50 31.3%
proposed use of the
proceeds Increase of Bank Deposits 79 49.4%
Replacement of the Technical System for Insurance and
15 9.4%
Financial Operations
Estimated Offering Expenses 7 4.3%
Total Offer Proceeds 160 100.0%
Source: The Company
*These numbers and percentages are approximate.

It is expected that the Offering Expenses will amount to approximately six million nine hundred and twenty-five thousand
(6,925,000) Saudi Riyals covering the fees of: the Financial Advisor, Underwriting Manager, Underwriter, Legal Advisor,
Offering Expenses
Auditors, media and public relations advisor, in addition to the underwriting expenses, marketing, printing, distribution and other
expenses related to the subscription (for more information, kindly refer to Section (6) “Use of Offer Proceeds”).
Net Proceeds from the
The net proceeds of the Offering are expected to amount to approximately one hundred and fifty-three million and seventy-five
Offering after deducting
thousand (153,075,000) Saudi Riyals (for more information, kindly refer to Section (6) “Use of Offer Proceeds”).
the Offering Expenses
Total proceeds raised on
the most recent rights
issue, its breakdown and
description as well as the The Company has not previously issued any Rights Shares.
use or the expected use
of such proceeds not yet
utilized
Material changes to the
The previous Prospectus was published on 08/10/1428H (corresponding to 20/10/2007G). In order to review the material changes
information disclosed
made to the information provided in the most recent prospectus, kindly refer to Paragraph No. (9.11) “Material Information that
in the most recent
Changed since the CMA’s Approval on the Most Recent Prospectus” of Section No. (9) “Legal Information”).
prospectus
Issuer’s capital before
One hundred and forty million (140,000,000) Saudi Riyals.
Offering
Total number of issued
Fourteen million (14,000,000) fully-paid Ordinary Shares.
shares

Nominal value of share Ten (10) Saudi Riyals per share.

The increase in the Company’s capital will be from one hundred and forty million (140,000,000) Saudi Riyals to three hundred
Capital increase
million (300,000,000) Saudi Riyals.
Total number of offered
Sixteen million (16,000,000) Ordinary Shares.
shares

x
Percentage of offered
Shares to the Capital of About (114.29%).
the Issuer

Offer Price Ten (10) Saudi Riyals per share.

Total Value of Offer One hundred and sixty million (160,000,000) Saudi Riyals.

Number of Offer Shares

Sixteen million (16,000,000) Ordinary Shares.
underwritten
Total value of the Offer
One hundred and sixty million (160,000,000) Saudi Riyals.
Shares underwritten
Total number of shares
issued after capital Thirty million (30,000,000) Ordinary Shares.
increase
Issuer’s capital after
Three Hundred million (300,000,000) Saudi Riyals.
capital increase
Types of targeted
Registered Shareholders and New Investors.
investors
Shareholders who own shares at the end of trading on the day of the EGA’s meeting for the capital increase and who are registered
Eligible Persons in the Company’s Shareholders Register at the Depository Center at the end of trading on the second Trading Day following the
EGA’s meeting on Wednesday 20/12/1445H (corresponding to 26/06/2024G).
All investors whether individual or institutional investors - other than Registered Shareholders - who have purchased Rights Issue
New Investors
during the Trading Period.
Rights Issue are tradable securities giving their holder the right to subscribe to the New Shares offered, after approval of the capital
increase. These securities are considered as acquired rights to all Registered Shareholders. These Rights may be traded during
the Trading Period. Each Right grants its holder the eligibility to subscribe to one New Share at the Offer Price. The Rights Issue
Rights Issue
will be deposited in the portfolio of Registered Shareholders following the meeting of the EGA related to the capital increase.
Said Rights will appear in the portfolios of the Registered Shareholders under a new code designated for Rights. Registered
Shareholders will be notified of the deposit of rights in their portfolios.
Number of Rights Issue
Sixteen million (16,000,000) Rights.
issued
Each Registered Shareholder is granted with (1.1429) rights for each (1) share he owns, and this factor results from dividing the
Eligibility Ratio
number of New Shares by the number of the Company’s current shares.
Shareholders at the end of the trading day of the EGA approving the Capital Increase who are registered in the Company’s
Eligibility Date shareholders register at the Depository Center at the end of the second Trading Day following the EGA approving the Capital
Increase on Wednesday 20/12/1445H (corresponding to 26/06/2024G).
Shares will be allocated to each investor based on the number of Rights properly and fully exercised. Fractional shares (if any)
will be added together and offered to Institutional Investors during the Rump Offering Period. The Company will receive the
total Offer Price of the sale of the Rump Shares. The rest of the proceeds (if any) will be distributed, without calculating any fees
or deductions, (the amount exceeding the Offer Price), to those who have not fully or partially subscribed for the New Shares
Methods of Allocation
and to the persons entitled to Fractional Shares knowing that the investor who hasn’t subscribe or hasn’t sell his rights, and the
and Excess Refund
holders of fractional shares may not receive any compensation if the sale has occurred during the Rump Offering Period at the
Offer Price. (For further information, kindly refer to section (12) “Information Related to Shares and Terms and Conditions
of the Offering”). The Subscription Surplus (if any) will be refunded to the subscribers without any commissions or deductions
from the Lead Manager.
Date of Refund of The Surplus of Subscription (if any) will be refunded without any commissions or deductions from the Lead Manager no later than
Surplus Subscription Monday 15/02/1446H (corresponding to 19/08/2024G).
The Offer Period starts on Tuesday 26/12/1445H (corresponding to 02/07/2024G) and continues until the end of Tuesday
03/01/1446H (corresponding to 09/07/2024G). It is permissible during this period for all Rights Issue holders - whether
they are Registered Investors or New Investors - to trade Rights issue. It is to be noted that the Subscription Period starts on
Tuesday 26/12/1445H (corresponding to 02/07/2024G) and continues until the end of Sunday 08/01/1446H (corresponding to
Offer Period
14/07/2024G). It is permissible during this period for all Rights Issue holders - whether they are Registered Investors or New
Investors - to subscribe for Rights issue. It is to be noted that the Subscription and Trading Period will begin on the same day.
While the Trading Period continues until the end of the sixth day from the beginning of the period, the Subscription Period
continues until the end of the ninth day from the beginning of the same period.

Rump Shares The Shares that have not been subscribed for during the Subscription Period.

Subscription applications are submitted electronically through the websites and platforms of electronic brokers that offer such
Subscription Method
services to subscribers or through any other means provided by brokers.

xi
 Eligible Persons are entitled to subscribe for Rights Issue Shares electronically through the electronic websites and platforms of
brokers that offer such services to subscribers or through any other means provided by brokers. Eligible Persons can also exercise
their Rights as follows:
1. Registered Shareholders are entitled during the Subscription Period to exercise the Rights granted to them on the Eligibility
Rights Subscription Date and any additional Rights they have purchased during the Trading Period while subscribing for New Shares. They
Exercise have also the right not to take action regarding their shares.
2. During the Subscription Period, New Investors have the right to exercise the Rights they have purchased during the
Trading Period while subscribing for New Shares. They have also the right not to take action regarding their shares.
In the event that neither Registered Shareholders nor New Investors exercise their rights to subscribe for the New Shares during
the Subscription Period, then, shares associated with such rights will be offered during the Rump Offering Period.
The indicative value of the Right reflects the difference between the market value of the Company’s shares during the Trading
Indicative Value of the Period and the Offer Price. Tadawul will calculate and publish the Right’s Indicative Value during the Trading Period on its
Right website, five (5) minutes late. Market information providers will also publish this information, in order for investors to see the
Right’s indicative value when entering orders.
It is the price at which the Right is traded. This price is determined through the market offer and demand mechanism, therefore it
Right trading price
may differ from the indicative value of the Right.
In the event that any shares remain unsubscribed for at the end of the Subscription Period (Rump Shares), those shares will be
offered to a number of Institutional Investors (Institutional Investors), and such Institutional Investors have to submit offers to
purchase the Rump Shares. Offers will be accepted starting (10) am on Wednesday 11/01/1446H (corresponding to 17/07/2024G)
Rump Offering until (5) pm on Thursday 12/01/1446H (corresponding to 18/07/2024G) (Rump Offering Period). Rump Shares will be allocated
to Institutional Investors with the highest bid, to the lowest (provided that it is not less than the Offering Price). The shares will
be proportionately allocated among the Institutional Investors that tendered offers at the same price. As for Fractional Shares (if
any), they will be added to the Rump Shares and treated similarly.

Allocation Date Shares will be allocated no later than Tuesday 17/01/1446H (corresponding 23/07/2024G).

Cash compensation will be paid to Eligible Persons who have not subscribed wholly or partially for the New Shares and to
Payment of those who are entitled to fractional shares, without any deductions, at the latest on Monday 15/02/1446H (corresponding to
Compensation (if any) 19/08/2024G). It is to be noted that the amounts of compensation represent the remaining proceeds of the sale of the Rump Shares
and fractional shares.
The Company’s share price on the Saudi Stock Exchange (Tadawul) has been adjusted to 18.26 Sau-di Riyals per share, by the
Adjusted Price end of trading day following the Extraordinary General Assembly’s meet-ing approving the Capital Increase. This represents a
decrease in the share price by 9.44 Saudi Riyals per share.
The New Shares will start being traded in Tadawul upon completion of all procedures related to the registration, allocation and
Trading of New Shares
listing the New Shares.
Right Issue are traded in Tadawul and their trading occurs during the Trading Period of Rights Issue. A separate Rights symbol will
be designated, distinct from the symbol used for the Company’s existing shares on Tadawul’s interface. During the Trading Period,
the shareholders have several options, including selling the Rights or any part thereof in the Exchange, purchasing additional
Listing and Trading of Rights through the Exchange or abstaining from taking any action regarding the Rights Issue Shares either by selling them or
Rights purchasing additional Rights. During the Trading Period, New Investors will have the right to buy Rights in the Exchange, or sell
them all or in part, or take no action regarding the Rights acquired during the Trading Period.
“Tadawul” system will void the Company’s Rights symbol of the on the Trading Screen upon the end of the Trading Period.
Hence, trading of Rights will cease upon the end of this period.

New Shares Dividends Holders of the New Shares will be entitled to any dividends announced by the Company after the date of their issuance.

All Company’s shares are of one class, and no share gives its holder preferential rights. New shares will be fully paid and equal to
Voting Rights the existing shares. Each share gives its holder the right to one vote, and every Shareholder in the Company has the right to attend
the meeting of the General Assembly of Shareholders (whether Ordinary or Extraordinary) and vote in it.
With the exception of regulatory restrictions that are in general imposed on the listing of shares, no restrictions are imposed
on the trading of the Company’s shares. It is to be noted that the Company’s shares were listed in Tadawul on 03/02/1426H
Restrictions Imposed on (corresponding to 10/02/2008G), and therefore the Lock-Up Period, which lasts three full financial years, each of which is not
Shares or Rights less than twelve months, have been expired for the Founding Shareholders. Therefore, all shares are tradable in accordance with
the rules, regulations and instructions issued by the CMA. However, the Company’s Founding Shareholders have to obtain the
approval of the Insurance Authority.
Restrictions imposed on
There are no restrictions imposed on the trading of Rights.
Rights trading
Restriction imposed on
There are no restrictions imposed on the Shareholders in general and the Founding Shareholders after the Subscription process
New Shares as a result of
resulting from the Capital increase.
capital increase

xii
 On 03/02/1426H (corresponding to 10/02/2008G), all of the Company’s shares were registered and listed on the Saudi Exchange
with a capital of two hundred million (200,000,000) Saudi Riyals divided into twenty million (20,000,000) shares with a nominal
value of ten (10) Saudi Riyals per share. On 26/06/1434H (corresponding to 06/05/2013G), the EGA approved the increase
of the Company’s capital by an amount of fifty million (50,000,000) Saudi Riyals by granting one bonus share for every (4)
outstanding shares, provided that the value of the capital increase is paid by transferring an amount of fifty million (50,000,000)
Saudi Riyals from retained earnings. Thus, the Company’s capital becomes two hundred and fifty million (250,000,000) Saudi
Riyals divided into twenty-five million (25,000,000) shares with a nominal value of ten (10) Saudi Riyals per share, based on
the recommendation of the Board of Directors dated on 20/04/1434H (corresponding to 02/03/2013G) and the non-objection of
the Saudi Central Bank. On 16/11/1439H (corresponding to 29/07/2018G), the EGA approved the increase of the Company’s
capital from two hundred and fifty million (250,000,000) Saudi Riyals divided into twenty five million (25,000,000) shares with
a nominal value of ten (10) Saudi Riyals per share by an amount of one hundred fifty million (150,000,000) Saudi Riyals by
granting (3) bonus shares for every (5) outstanding shares, provided that the capital increase is made by capitalizing the amount
of one hundred and fifty million (150,000,000) Saudi Riyals (i.e the amount of one hundred and nineteen million (119,000,000)
Saudi Riyals from the retained earnings account and the amount of thirty-one million (31,000,000) Saudi Riyals from the statutory
reserve). Hence, the Company’s capital becomes four hundred million (400,000,000) Saudi Riyals divided into forty million
(40,000,000) shares with nominal value of (10) Saudi Riyals per share, based on the recommendation of the Board of Directors
Previously Listed Shares
dated on 14/08/1439H (corresponding to 30/04/2018G) and the non-objection of the Saudi Central Bank. On 05/02/1444H
(corresponding to 01/09/2022G), the Board of Directors resolved to recommend to the EGA a capital reduction from four hundred
million (400,000,000) Saudi Riyals divided into forty million (40,000,000) shares with a nominal value of ten (10) Saudi Riyals
per share to one hundred and forty million (140,000,000) Saudi Riyals divided into fourteen million (14,000,000) shares with a
nominal value of (10) Saudi Riyals per share, with a reduction rate of (65%) in order to restructure the Company’s capital and
extinguish (100%) of the accumulated losses which reached (65%) of the capital, by canceling twenty-six million (26,000,000)
of the Company’s shares. On 24/02/1444H (corresponding to 20/09/2022G), the Company received the Saudi Central Bank’s
letter No. (44015739) approving the capital to reduction by two hundred and sixty million (260,000,000) Saudi Riyals, so that
the capital becomes one hundred and forty million (140,000,000) Saudi Riyals divided into fourteen million (14,000,000) shares
with a nominal value of ten (10) Saudi Riyals per share. The Company then submitted a file to the Capital Market Authority
(CMA) to request its approval on the capital reduction on 25/02/1444H (corresponding to 21/09/2022G) which was obtained on
09/03/1444H (corresponding to 05/10/2022G). On 17/03/1444H (corresponding to 13/10/2022G), the EGA also approved the
reduction of the Company’s capital from four hundred million (400,000,000) Saudi Riyals divided into forty million (40,000,000)
shares with a nominal value of ten (10) Saudi Riyals per share to one hundred and forty million (140,000,000) Saudi Riyals
divided to fourteen million (14,000,000) shares with a nominal value of ten (10) Saudi Riyals per share, i.e., a reduction of two
hundred and sixty million (260,000,000) Saudi Riyals.
Eligible Persons wishing to subscribe for New Shares have to meet the relevant subscription requirements. To review the
Terms of Subscription
Subscription’s terms, conditions, and instructions, (and for more information, kindly refer to section (12) “Information Related
for Rights Issue Shares
to Shares and Terms and Conditions of the Offering” of this Prospectus.
Investment in the Rights Issue Shares involves certain risks that can be classified into: (1) Risks Related to the Company’s
Activities; (2) Risks Related to the Market and Industry; and (3) Risks Related to the New shares.
Risk Factors
These risks are described in Section (2) “Risk Factors” of this Prospectus, that should be carefully reviewed before making any
investment decision in the Rights Issue Shares.

Note: The “Important Notice” section and section (2) “Risk Factors” of this Prospectus should be carefully considered prior to making a
decision to invest in this Rights Issue Shares in accordance with this Prospectus.

xiii
Key Dates and Subscription Procedures
Event Date

Date of the EGA’s meeting approving the Capital Increase and

setting the Eligibility Date and Eligible Shareholders, noting that
Eligible Shareholders are the Shareholders who own shares at
the end of the trading day of the EGA’s meeting for the Capital On Wednesday 20/12/1445H (corresponding to 26/06/2024G).
Increase and are registered in the Company’s shareholders register
at the Depository Center at the end of the second trading day
following the EGA’s meeting for the Capital Increase.
The Trading Period starts on Tuesday 26/12/1445H (corresponding to 02/07/2024G)
and ends on Tuesday 03/01/1446H (corresponding to 09/07/2024G). During this period,
Trading Period
all Rights holders – whether they are Registered Shareholders or New Investors – are
entitled to trade in the Rights.
The Subscription Period starts on day Tuesday 26/12/1445H (corresponding to
02/07/2024G) and lasts until the end of day Sunday 08/01/1446H (corresponding to
Subscription Period
14/07/2024G). During this period, all Rights holders – whether they are Registered
Shareholders or New Investors – are entitled to subscribe for New Shares.
The Subscription Period and the receipt of subscription requests and applications ends on
End of Subscription Period
Sunday 08/01/1446H (corresponding to 14/07/2024G).
The Rump Offering Period starts at 10:00 am on Wednesday 11/01/1446H (corresponding
Rump Offering Period to 17/07/2024G) and continues until 5pm on Thursday 12/01/1446H (corresponding to
18/07/2024G).

Final Allocation Notice On Tuesday 17/01/1446H (corresponding 23/07/2024G).

Payment of Compensation (if any) for Eligible Person who did not
participate in the subscription in whole or in part and for those who On Monday 15/02/1446H (corresponding to 19/08/2024G).
are eligible for fractional shares (if any)
The shares offered for subscription will be traded upon completion of all relevant
Trading Date of the New Shares
regulatory procedures. It will be announced later on Tadawul website.

Note: All dates mentioned in the above table are approximate. Actual dates will be announced on the website of the Saudi Stock Exchange
(Tadawul) (www.saudiexchange.sa).

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Key Announcement Dates
Announcement Announcing Party Date

Announcement regarding the invitation of the Extraordinary

The Company On Tuesday 27/11/1445H (corresponding to 04/06/2024G)
General Assembly for the capital increase
Announcement of the Extraordinary General Assembly’s
The Company On Thursday 21/12/1445H (corresponding to 27/06/2024G)
meeting result regarding the Capital Increase
Announcement of the amendment of the Company’s share
Tadawul On Thursday 21/12/1445H (corresponding to 27/06/2024G)
price, the deposit of Rights and the right’s indicative value.

Announcement on adding the Rights. Edaa On Monday 25/12/1445H (corresponding to 01/07/2024G)

Announcement of the Trading Period and Subscription Period

The Company On Sunday 24/12/1445H (corresponding to 30/06/2024G)
for the New Shares
Announcement of the commencement of the Rights’ Trading
Tadawul On Monday 25/12/1445H (corresponding to 01/07/2024G)
Period and the New Shares’ Subscription Period
Reminder about the commencement of the Rights’ Trading
The Company On Tuesday 26/12/1445H (corresponding to 02/07/2024G)
Period and the New Shares’ Subscription Period
Reminder about the last day for Rights Trading and the
importance of selling Rights for those who do not wish to The Company On Monday 02/01/1446H (corresponding to 08/07/2024G)
subscribe
Announcement of the:
- subscription results
The Company On Monday 09/01/1446H (corresponding to 15/07/2024G)
- details of the Rump Shares sale (if any) and the
commencement of the Rump Offering Period
Announcement of the result of the Rump Offering and
The Company On Tuesday 17/01/1446H (corresponding to 23/07/2024G)
notification of final allocation
Announcement of the deposit of the New Shares in the
Edaa On Thursday 19/01/1446H (corresponding to 25/07/2024G)
investors’ portfolios*
Announcement of the distribution of the compensation
The Company On Monday 15/02/1446H (corresponding to 19/08/2024G)
amounts (if any)

Note: All dates mentioned in the above table are approximate, and the actual dates will be announced on the Saudi Tadawul website (www.saudiexchange.sa), in coordination with the
Securities Depository Center Company (Edaa) to determine the date of depositing the shares.
*It should be noted that the time period between the end of subscription for Rights Issue and the deposit of shares in the Shareholders’ portfolios is nine (9) working days.

It should also be noted, as per the provisions of Article 51 of the Rules on the Offer of Securities and Continuing Obligations, that if a disclosure
related to the offering is published in a local newspaper after the publication of the Prospectus, the announcement must include the following:

1. The name and commercial registration certificate of the Issuer.

2. The securities that are subject of the relevant application for registration and offer and their value, type and class.
3. The addresses and locations where the public may obtain the Prospectus.
4. The date of publication of the Prospectus.
5. A statement that the disclosure is for information only and does not constitute an invitation or offer to acquire, purchase or subscribe
for securities.
6. The names of the lead manager, the underwriter, the financial and legal advisors.
7. A disclaimer as follows: “The Capital Market Authority and the Saudi Stock Exchange Company take no responsibility for the
contents of this disclosure, make no representations as to its accuracy or completeness, and expressly disclaim any liability whatsoever
for any loss arising from, or incurred in reliance upon, any part of this disclosure.”

xv
How to Apply for Subscription
Subscription to the Rights Issue Shares is limited to Eligible Persons, whether they are Registered Shareholders or New Investors. In the event
that the Rights of Eligible Persons are not exercised, any Rump Shares that were not subscribed for by Eligible Persons shall be offered to
Institutional Investors during the Rump Offering Period.

Eligible Persons wishing to subscribe for New Shares can either use trading platforms through which buy and sell orders are entered, or submit
their subscription application through the means and services dispensed by the broker to the investors, provided that they have an investment
account with one of the brokers who provide these services and that their data have been updated, and that no changes have occurred to their
personal information since they subscribed to a recent offering unless these amendments have been communicated to brokers and approved
by them.

The Company reserves the right to reject any application for the New Shares subscription in whole or in part if it does not fulfill any of the
conditions or requirements of the subscription. It is not permitted to amend or withdraw the subscription application after its submission.
The subscription application, upon its submission, constitutes a binding contract between the Company and the Eligible Person (for more
information, kindly refer to Section (12) “Information Related to Shares and Terms and Conditions of the Offering”).

Questions and Answers on Rights Issue

What is a Rights Issue?

Rights Issue are tradable securities that give their holder the right to subscribe for the New Shares offered, upon approval of the EGA on the
capital increase by issuing new shares. All shareholders registered in the Company’s shareholders register at the Depository Center at the end
of the second trading day following the date the EGA’s meeting approving the capital increase will be entitled to receive said Rights. Each right
grants its holder the eligibility to subscribe for one new share at the Offer Price.

Who is granted the Rights Issue?

All registered shareholders in the Company’s shareholders register at the Depository Center at the end of the second trading day following the
EGA’s meeting approving the capital increase.

When are the Rights Issue deposited?

After the EGA approval on the capital increase through the offering of Right Issue Shares, the Rights Issue are deposited as securities in the
shareholders’ portfolios in the Company’s shareholders’ register at the Depository Center at the end of the second trading day after the EGA’s
meeting; and the Rights Issue will be listed in the shareholders’ portfolios under a new symbol. These rights will only be traded or subscribed
for at the beginning of the Trading and Subscription Periods.

How are investors notified of the Rights being deposited in their portfolios?
The notification is made through announcement on the Tadawul website, as well as through the (Tadawulaty) service provided by the Securities
Depository Center Company (Edaa), and short text messages (SMS) are also sent through brokers.

How many Rights Issue can be acquired by a Registered Shareholder?

The number is subject to the Rights Issue ratio and the number of the current Shares held by the Shareholder in the capital as well as in the
Company Shareholders’ Register at the Securities Depository Center Company (Edaa) at the end of the second trading day following the
Extraordinary General Assembly’s meeting approving the capital increase.

What is the Subscription Eligibility Ratio?

It is the ratio that enables the Registered Shareholder to know how many Rights he/she is entitled to in relation to the current shares that he/
she already owns at the end of the second trading day following the EGA’s meeting approving the capital increase. This factor is calculated by
dividing the number of new shares by the number of the current shares of the Company, and accordingly, the eligibility ratio is (1.1429) Rights
approximately for every (1) share owned by the Registered Shareholder on the eligibility date. Thus, if a Registered Shareholder owns (1,000)
shares on the eligibility date, then he/she will be allocated (1,142) Rights in exchange for the shares he/she owns.

Will the name and symbol of trading these rights differ from the name and symbol of the Company’s shares?
Yes, the acquired rights will be deposited in the investors’ portfolios under the original name, adding the Rights Issue term as well as a new
symbol for these rights.

xvi
What is the value of the Rights at the beginning of trading?
The opening price of the Right is the difference between the closing price of the share on the day preceding the Rights listing and the Offer Price
(the indicative value of the Right). For example, if the closing price of a share on the previous day is fifteen (15) Saudi Riyals and the Offer
Price is ten (10) Saudi Riyals, the opening price of the Rights upon the commencement of trading will be five (5) Saudi Riyals.

Who is a Registered Shareholder?

Any shareholder owning shares at the end of the trading day of the EGA’s meeting approving the capital increase and registered in the
Company’s Shareholders Register at the Depository Center at the end of the second trading day following the EGA’s meeting held to approve
the capital increase.

Can registered shareholders subscribe to additional shares?

Yes, Registered Shareholders can subscribe to additional shares by purchasing new Rights during the Trading Period and then subscribe to them
during the Subscription Period after completing the purchase and settlement of Rights.

Is it possible for a shareholder to lose his/her eligibility to subscribe even if he/she has the right to attend the
Extraordinary General Assembly’s meeting and vote on increasing the capital through a Rights Issue?
Yes, the Shareholder loses his/her eligibility to subscribe if he/she sells his/her shares on the day of the EGA’s meeting approving the capital
increase or one business day prior to said meeting.

How is the Subscription process implemented?

The subscription process is implemented, as is currently being done, through submitting subscription applications during the Subscription
Period through the investment portfolio on the trading platforms through which the purchase and sell orders are filed. In addition to the
possibility of subscription through any other means provided by the broker and the custodian of shares.

What are the Trading and Subscription periods?

Trading and Subscription of rights begin at the same time after (3) three business days from the approval of the EGA on the Capital Increase,
until the end of trading of the sixth day while the subscription continues until the ninth day, according to what is mentioned in this prospectus
and the Company’s announcements.

Can an Eligible Person subscribe to more shares than the Rights owned by him/her?
An Eligible Person cannot subscribe to more shares than the Rights owned by him/her.

Is it possible to Subscribe more than once and through more than one broker?
Yes, it is possible and the number of New Shares that can be subscribed through each broker will depend on the number of Rights available
in the investment portfolio of the relevant broker. In all cases, it must be taken into consideration that the quantity of new subscribed shares
does not exceed the number of Rights Issue owned at the end of the Rights Issue’s trading period, as such will result in cancellation of the
subscription application.

If the Company shares are acquired through more than one investment portfolio, in which portfolio will the Rights
Issue be deposited?
Rights Issue will be deposited in the same portfolio where the company’s rights-related shares are deposited. For example, if a shareholder
holds one thousand (1,000) shares in the Company: eight hundred (800) shares in portfolio (A) and two hundred (200) shares in portfolio (B),
then the total rights amounting to one thousand one hundred forty-two (1,142) Rights, as each share is eligible for (1.1429) Rights. Therefore,
nine hundred fourteen (914) rights will be deposited in portfolio (A) and two hundred twenty-eight (228) Rights will be deposited in portfolio
(B).

Are share certificate holders allowed to subscribe and trade?

Yes, holders of share certificates are allowed to subscribe. However, they will not be able to trade unless share certificates are deposited in
investment portfolios through the brokers or Depository Center of the Saudi Exchange (Edaa) and submitting the required documents, before
the end of Subscription Period.

xvii
What happens if New Shares are subscribed and Rights are subsequently sold?
If a Registered Shareholder subscribed for New Shares and then sells the Rights without purchasing a number of Rights equal to the number of
exercised Rights, he/she subscribed in before the end of the Trading Period, then the subscription application will be rejected entirely, if all the
rights have been sold, or partially in an amount equal to the number of sold rights. The Registered Shareholder will be notified and refunded
the rejected subscription amount by the broker.

Are additional Rights purchasers entitled to trade them once again?

Yes, purchaser of additional Rights may sell them and purchase other Rights during the Trading Period, only.

Is it possible to sell a part of the Rights Issue?

Yes, the Investor can sell a part of these Rights and subscribe for the remaining part.

When can a shareholder subscribe for the Rights Issue, he/she purchased during the Trading Period?
After settlement of the purchase of Rights (which is two business days), provided that the subscription for Rights Issue is completed during
the Subscription Period.

Can the Eligible Person sell or assign the Rights Issue after the end of the Trading Period?
No, it is not possible. After the expiry of the Trading Period, the Eligible Person may only exercise the right to subscribe for the Rights Issue
Shares or not. In case the Right is not exercised, the investor may be subject to loss or decrease in the value of his investment portfolio.

What happens to Rights Issue that are unsold or unsubscribed for during the Trading and Subscription Periods?
If the New Shares are not fully subscribed for during the Subscription Period, the remaining New Shares will be offered for subscription
through an offering to be organized by the Lead Manager. The amount of compensation (if any) to the Rights holder will be calculated after
deducting the subscription value. The investor may not receive any compensation if the sale occurs during the Rump Offering Period at the
Offer Price.

Who has the right to attend the Extraordinary General Assembly and vote on increasing the Company’s capital
through offering Rights issue shares?
A shareholder registered in the Company’s shareholders’ register at the Depository Center at the end of the trading session, on the date of the
EGA’s meeting, has the right to attend the EGA’s meeting and vote on increasing the Issuer’s share capital through a Rights Issue.

When is the share price adjusted as a result of increasing the Issuer’s share capital through a Rights Issue?
The share price is adjusted by Tadawul before the start of trading on the day and following the EGA’s meeting.

If an investor buys securities on the date of the EGA, will he/she be eligible for the Rights resulting from the
increase of the Issuer’s share capital?
Yes, as the investor will be registered in the Company Shareholders Register two business days after the date of the purchase of shares (i.e.,
at the end of the second Trading Day following the day of the EGA), bearing in mind that Rights Issue will be granted to all shareholders
registered in the Company Shareholders Register at the end of trading session on the second trading day following the date of the EGA.
However, he/she may not attend or vote in the EGA for the capital increase.

If an investor has more than one portfolio with more than one brokerage company, how will their Rights be
calculated?
The investor’s shares will be distributed to their portfolios according to the percentage of ownership in each portfolio. In the event of fractional
share, these fractions will be aggregated. If the outcome is an integer or more, the integer number will be added to the portfolio in which the
investor has the largest number of Rights.

Will any other fees be added for Rights Trade?

The same commissions will be applied to selling and buying transactions as they are in shares, but without a minimum commission amount,
provided that the maximum amount does not exceed fifteen and a half basis point (0.155%) of the total transaction value.

Is it possible to subscribe during the weekend?

No, it is not possible.

xviii
Can public investors other than registered shareholders subscribe for Rights Issue shares?
Yes, after completing the purchase of Rights Issue through the market during the Trading Period.

Summary of Key Information

Notice
This summary provides a brief overview of the basic information included in this Prospectus. Since it is a summary, it does not include all
information that may be of interest to Shareholders and other general Institutional and Individual Investors. Recipients of this Prospectus
should read it in full before making an investment decision related to New Rights or Shares and not rely solely on the definitions and terms
section or the summary of this Prospectus.

Company Overview
Al Sagr Cooperative Insurance Company is a Saudi public joint stock company, established pursuant to the Royal Decree No. (M/11) dated
16/02/1428H (corresponding to 06/03/2007G) and Ministerial Resolution No. (63) dated 15/02/1428H (corresponding to 05/03/2007G) and
License No. (TMN/13/20083) issued by the Saudi Central Bank dated 23/03/1429H (corresponding to 31/03/2008G) to carry out insurance
activity in accordance with the provisions of the Cooperative Insurance Companies Control Law and its Implementing Regulations.

It is registered before the Commercial Registrar in Al-Khobar under certificate No. (2051036871) dated 22/03/1429H (corresponding to
30/03/2008G). The current Capital of the Company is one hundred and forty million (140,000,000) Saudi Riyals divided into fourteen million
(14,000,000) shares with a nominal value of ten (10) Saudi Riyals per share fully paid. As of the date of this Prospectus, the substantial
Shareholders of this Company, who own more than (5%) of the shares of the Company, is Al Sagr National Insurance Company) an Emirati
public joint stock company) owns three million six hundred and forty thousand (3,640,000) shares representing (26%) of the Company’s
Shares.

Company’s Main Activities

The Company’s activities, according to the Commercial Registry Certificate, are: health insurance, general insurance. According to Article (3)
of the Bylaws, the Company carries out cooperative insurance business and all related activities, including reinsurance, agencies, representation,
correspondence, or mediation, and the company may carry out all works deemed necessary to achieve its purposes, whether in the field of
insurance or investing its funds. The Company owns and moves fixed and cash assets, sells them, exchanges them, or leases them directly or
through companies it establishes or purchases with other parties. The company carries out its activities in accordance with the Cooperative
Insurance Companies Control Law and its Implementing Regulations, the provisions issued by the regulatory authority, and the regulations and
rules in effect in the Kingdom of Saudi Arabia, and upon obtaining the necessary licenses from the competent authorities, if any.

a. Health insurance: Al Sagr provides one of the best medical protection insurance programs for clients, in accordance with the terms,
conditions and regulations of the Cooperative Council of Health Insurance in the Kingdom of Saudi Arabia, in addition to offering a
comprehensive and reliable medical network of medical service providers such as hospitals, dispensaries and pharmacies.
b. Property Insurance: This form of insurance is designed to cover the following areas:

- Fire and Lightning Insurance: Protection of property in a specific location.

- All-risk Property Insurance: Protection of property from damage as a result of an accident.
- Loss of Profit Insurance: Coverage of loss of business interruption damage resulting from an accident.

c. Travel Insurance: Protection against losses resulting from travel.

d. Marine Insurance:

- Marine Cargo Insurance: Protection of cargo and coverage of any loss or damage to goods in transit.
- Ship or Hull Insurance: Protection of the hull of ships against marine accidents.

e. Engineering Insurance:

- General Liability Insurance for Contractors: Insurance for contractors’ work against any damage resulting from accidents.
- Equipment Insurance: Equipment insurance against external damage.
- Equipment Breakdown Insurance: Equipment insurance against sudden breakdown or damage.
- Insurance for Loss of Profits as a Result of Damage to devices & Equipment: Compensation for loss resulting from damage to
equipment and machinery.
- Boilers and Pressure Vessels Insurance: Compensation for any damage caused to boilers and pressure vessels.
- Goods Insurance: Coverage against damage to goods.
- Equipment Insurance: Coverage against damage resulting from electronic devices.

xix
 f. Vehicle/Motor Insurance: Protection against damage resulting from accidents.
g. Medical Malpractice Insurance: Protection against damages resulting from medical errors.
h. Liability Insurance:

- Workers Compensation Insurance: Compensation for damages occurring in the workplace.

- General Liability Insurance: Also known as business liability insurance, it protects businesses from claims that result from normal
business operations.
- Professional Liability insurance: Also known as Errors and Omissions (E&O) coverage, it is designed to protect the insured
against actual or alleged mistakes.

i. Miscellaneous Accident Insurance:

- Personal Accident Insurance: Compensation for injury or death damages.

- Money Insurance: Protection of the insured’s money.
- Fidelity Insurance: Compensation against damage caused by acts that cause loss of money, such as fraud.
- Theft Insurance: Compensation for losses resulting from theft.

j. Energy Insurance:

- Energy (Oil & Gas) Insurance (Onshore): Insurance of real estate and equipment for oil extraction, liquefied natural gas, petroleum
gas, petrochemical processing plants, or anything related thereto; Public facilities and others.
- Energy (Oil & Gas) Insurance (Offshore): Insurance of real estate and equipment related to fixed platforms, pipelines, drilling
machines, vessels and buoys, onshore gas processing facilities or other property, as well as the costs of monitoring expenses,
debris removal, or loss of production, or to protect and indemnify contractual or legal liabilities, and other acceptable related
interests.

Company’s Vision
“The Company aims to be one of the best leading insurance companies in the Kingdom of Saudi Arabia by providing insurance products and
services on high standards of quality, ethical practices, fairness and responsibility towards society”.

Company’s Mission
The Company’s mission focuses meeting all customer needs and provide high-quality and reliable insurance services. It also strives to be the
trusted and specialized partner in the client-provider relationship.

Company’s Strategy
Al Sagr Cooperative Insurance Company’s strategy focuses on providing innovative, high-quality insurance services to meet customer needs
and achieve competitive excellence as follows:

y Expanding Insurance Services: Providing a wide range of insurance services that include health insurance, general insurance, and
motor/vehicle insurance. This allows the Company to meet diverse customer needs and provide tailored insurance solutions.
y Investing in Technology: Developing advanced business management systems and using graphical analytics to improve operational
processes and enhance customer experience.
y Interacting with Customers: offering exceptional customer service through multiple channels such as phone, email, and social media
channels and responding promptly to meet all customers’ needs and immediately solve their issues.
y Offering Unique Products and Services: Providing comprehensive insurance coverage, flexibility in contracting, and customized
insurance options to meet different customer needs. Products and services must be competitive in terms of quality, cost and added
value.
y Partnerships and Distribution: Developing strategic partnerships with local insurance agents to expand the customer base and reach
different market segments. New distribution technologies such as online selling and mobile applications can be explored to facilitate
the purchasing process and provide insurance services conveniently and efficiently.
y Improving Risk Management: Developing an effective risk management strategy that helps reduce potential risks and improve
the efficiency of risk analysis and pricing. The Company must be able to provide comprehensive and efficient insurance coverage to
customers in addition to support in the event of accidents or claims.
y Data Analysis and Predictive Analytics: Using data analysis and predictive techniques to understand customers’ needs and guide
marketing and insurance decisions. Available data can be used to improve selection, pricing and distribution processes.

xx
Company’s Strengths and Competitive Advantages
Since its establishment in 2007G, Al Sagr Cooperative Insurance Company has gained experience in providing excellent insurance products
and services with the highest quality standards to its customers. At the early beginning, the Company has firmly established its vision in the
Saudi market and succeeded in building a good reputation and significant trust among individuals and companies alike. Believing in the value
of continuous growth and development, Al Sagr Company sought to be the first choice for insurance in the Kingdom of Saudi Arabia through
innovation and providing distinguished services to its customers using the latest technologies to be compatible with new business trends and
methods. The Company is also committed to following an ethical approach to the market and being socially responsible.

Brief Overview of the Insurance Sector in Saudi Arabia1

The insurance sector in the Kingdom of Saudi Arabia is an important and active sector that has witnessed sustained growth and remarkable
development in recent years. Insurance is considered an essential part of the country’s financial infrastructure, and contributes to enhancing
financial stability and stimulating sustainable economic growth in the Kingdom, which is witnessing an increasing demand for insurance
services and products. The insurance sector in Saudi Arabia is witnessing a major digital transformation, as companies work to adopt modern
technology such as artificial intelligence, graphic analytics, and cloud computing technologies. Insurance companies are currently seeking to
develop new and innovative products and services to meet changing customers’ needs and keep pace with new trends in the Saudi market.

The insurance sector is considered one of the most important financial services fields in any economy, and it keeps pace with and contributes
to supporting all other economic activities and maintaining its stability. According to the Saudi Insurance Market Report 2022G issued by
the Saudi Central Bank, said Bank issued several regulations to keep pace with changes in the sector and the economy in general, the most
prominent of which are:

- Comprehensive motor/vehicle insurance rules, which regulate the contractual relationship between the insurance company and
the insured, and specify the minimum coverage requirement for comprehensive motor/vehicle insurance coverages, in addition to
specifying provisions of the mandatory and optional coverages provided by the comprehensive motor/vehicle insurance policy.
- The model form for the professional liability insurance policy for auditors of establishments subject to the supervision of the CMA
which aims to unify the minimum that must be provided in the insurance policy, enhance the concept of sustainability, and reduce
potential risks in the capital market, in addition to protecting the rights of all the contracting parties of the insurance policy, in order to
guarantee their rights, and support opportunities for growth and development in the insurance sector.
- The model form of insurance in a domestic worker contract determines the minimum mandatory coverages, exceptions to these
coverages, compensation limits for a total amount of (25,000) Saudi Riyals, and reports and claims settlement procedures.
The Council of Ministers also issued a decision approving the inclusion of specialties mentioned in the mandatory cooperative insurance
against professional medical errors that includes (18) specializations in the health field. This step further enhances the concept of sustainability
among health service providers.

The healthcare sector continued to make significant progress during the year 2022G in the transition to implementing International Financial
Reporting Standard 17 (IFRS 17) and successfully completed two important stages, that included the completion of insurance companies the
execution of the second and third trials before the official launch on January 1, 2023G which reflects the successful completion of the fourth
and final phase of the roadmap for implementing International Financial Reporting Standard 17 (IFRS 17), which was launched by the Saudi
Central Bank in December 2018G. It should be noted that the results of the second trial’s execution was reviewed by the insurance company’s
external auditor, that raises the level of credibility of the results experimental trial and reduces the risk of late challenges arising from the
management of United Cooperative Assurance (UCA) when implementing the aforementioned Standard.

According to the insurance report for the year 2022G, the insurance sector witnessed in 2022G the effective merger of the two companies:
Walaa Cooperative Insurance and SABB Takaful, and the merger of two other companies: Arabian Shield Cooperative Insurance Company
and Al Ahli Takaful Company.

The below table outlines the most important items that constitute the sector, according to the Saudi Insurance Market Report issued by the
Saudi Central Bank in 2022G.

Table No. (1): Gross Written Premiums (GWP)

December 31, 2020G December 31, 2021G December 31, 2022G

Type of Insurance (Million SAR)
Total Total Total
Total (%) Total (%) Total (%)
(Million SAR)‫‏‬ (Million SAR)‫‏‬ (Million SAR)‫‏‬

Total Health Insurance 22,836.8 58.9% 25,109.3 59.7% 31,829.8 59.7%

Total General Insurance 14,678.3 37.9% 15,213.9 36.2% 19,652.8 36.8%

Total Protection and Savings Insurance 1,263.6 3.3% 1,707.2 4.1% 1,873.6 3.5%

Total 38,778.7 100.00% 42,030.40 100.00% 53,356.20 100.00%

Source: Saudi Insurance Market Report 2022G

1 Source: Saudi Central Bank, Saudi Insurance Market Report 2022.

xxi
Written premiums mean spending on different types of insurance as mentioned in the table above, and according to the Saudi Insurance Market
Report issued by the Saudi Central Bank in 2022G the gross written insurance premiums increased by 26.9% in 2022G to reach (53.36 billion)
Saudi Riyals compared to (42.03 billion) Saudi Riyals in 2021G. Health insurance maintained its position as the largest insurance activity in
volume in 2022G growing by 26.8%, and its share reached 59.7% of the gross written premiums.

Meanwhile, the share of general insurance in total insurance increased from 36.2% in 2021G to 36.8% in 2022G. The protection and savings
insurance, which represents the smallest share in the insurance market, witnessed a decrease from 4.1% in 2021G to reach 3.5% in 2022G.

Depth of the Insurance Market

Table No. (2): Insurance Market Depth to GDP

Type of Insurance December 31, 2020G December 31, 2021G December 31, 2022G

Total Health Insurance 0.87% 0.80% 0.77%

Total General Insurance 0.56% 0.49% 0.47%

Total Protection and Savings Insurance 0.05% 0.05% 0.05%

Total 1.48% 1.34% 1.29%

Source: Saudi Insurance Market Report 2022G

The depth of insurance is defined as gross written premiums to gross domestic product (GDP). According to the Saudi Insurance Market Report
for the year 2022G issued by the Suadi Central Bank, the depth of insurance decreased in 2022G to reach 1.29% compared to 1.34% in 2021G
due to the high GDP. The compound annual growth rate (average) for insurance depth reached 1% over the past five years.

Table No. (3): Insurance Market Depth to Non-oil GDP

Type of Insurance December 31, 2020G December 31, 2021G December 31, 2022G

Total Health Insurance 1.13% 1.14% 1.25%

Total General Insurance 0.73% 0.69% 0.77%

Total Protection and Savings Insurance 0.06% 0.08% 0.07%

Total 1.92% 1.91% 2.09%

Source: Saudi Insurance Market Report 2022G

The depth of non-oil insurance is the ratio of gross written premiums to non-oil GDP. The depth of insurance from non-oil GDP reached 2.09%
in 2022G, compared to 1.91% for 2021.

Insurance Market Density

Table No. (4): Insurance Market Density

Type of Insurance December 31, 2020G (SAR) December 31, 2021G (SAR) December 31, 2022G (SAR)

Total Health Insurance 644,76 717,14 933,13

Total General Insurance 414,42 434,52 576,14

Total Protection and Savings Insurance 35,68 48,76 54,93

Total 1,094.86 1,200.42 1,564.20

Source: Saudi Insurance Market Report 2022G

Insurance density means the rate of per capita spending on insurance (i.e., the total written premiums divided by the population of the KSA).
According to the Saudi Insurance Market Report for the year 2022G issued by the Saudi Central Bank, insurance density increased from
(1,200) Saudi Riyals per capita in 2021G to (1,564) Saudi Riyals per capita. In 2022G, an increase of 30.3%. The compound annual growth rate
(average) for the level of per capita spending on insurance services reached (- 6.9%) during the past five years.

xxii
Insurance Sector Workforce in the Kingdom of Saudi Arabia

Table No. (5): Insurance Sector Workforce in the Kingdom of Saudi Arabia

Nationality December 31, 2020G (SAR) December 31, 2021G (SAR) December 31, 2022G (SAR)

Non-Saudis 2,455 1,465 1,281

Saudis 8,447 5,021 5,554

Total 10,902 6,486 6,84

Saudization (Localization Rate) 77% 77% 81%

Source: Saudi Insurance Market Report 2021 – 2022G

The total number of employees working in insurance-related freelance companies in the KSA is (6,840) employees in 2022G, compared
to (6,486) employees in 2021G. The percentage of Saudi citizens working in freelancers’ companies reached (81%) of the total workforce
in 2022G. The percentage of Saudis in non-managerial positions in 2022G reached (80%), and the percentage of Saudis in administrative
positions reached (83%).

Insurance Market Trends in the Kingdom of Saudi Arabia2

According to the Financial Stability Report issued by the Saudi Central Bank in 2022G, the insurance sector launched several products in
2021G, such as travel insurance for citizens traveling abroad, package insurance, and insurance for self-driving vehicles. It is expected that the
diversification of insurance companies’ products will help expand the scope of market coverage and improve financial performance.

The insurance sector is generally characterized by strong financial solvency and sufficient technical provisions. It recorded a good performance
during 2021G in terms of growth, but it also faced challenges in profitability. The growth in gross written premiums was supported by
the increase in the health insurance sector. The financial solvency of the sector indicated a significant increase in regulatory capital levels.
However, the loss ratio and technical reserves increased in 2021G, and the sector incurred a slight loss attributable to increased claims and
competition with the resumption of economic activities.

It should be noted that health insurance and motor/vehicle insurance still account for the largest percentage of the insurance sector, as they
constituted together a percentage of (79.2%) of the total written premiums in the insurance sector during 2021G. The share of health insurance
in total written insurance premiums increased to (59.7%) during 2021G, compared to (58.9%) in 2020G. While the share of motor/vehicle
insurance decreased from (21.6%) in 2020G to (19.4%) in 2021G.

The five largest insurance companies accounted for about (68.8%) of the total insurance premiums written in 2021G. The concentration of
premiums reached its highest levels in health insurance activity, as the five largest companies acquired (85.3%) of the total premiums of health
insurance activity during 2021G.

Summary of Financial Information

The summary of financial information outlined below is based on the audited financial statements for the fiscal years ended on December 31,
2020G, 2021G, and 2022G, and the condensed financial information for the nine-month period ending on September 30, 2023G and the notes
attached thereto. Therefore, it should be read in conjunction with them.

The audited financial statements for the year ended on December 31, 2020G were audited by PricewaterhouseCoopers (PwC) Certified Public
Accountants and Ibrahim Ahmed Al Bassam & Co. Certified Public Accountants. As for the audited financial statements for the years ended
on December 31, 2021G and 2022G and the interim condensed financial information for the nine-month period ending on September 30,
2023G (unaudited), they have been prepared by PricewaterhouseCoopers (PwC) Certified Public Accountants and Al-Kharashi & Co. Certified
Accountants and Auditors.

The financial statements for the financial years 2020G, 2021G, and 2022G, the summary interim financial information for the nine-month
period ending on September 30 2023G, and the attached notes have been prepared in accordance with the International Financial Reporting
Standards (IFRS) adopted in the Kingdom of Saudi Arabia and other standards and issuances adopted by the Saudi Organization for Chartered
and Professional Accountants (SOCPA).

2 Source: Saudi Central Bank, Financial Stability Report 2022.

xxiii
Key Performance Indicators
Financial Year ending on September 31
Main Indicators
2020G 2021G 2022G
Audited Audited Audited

Growth rate of gross written premiums NA 15.6% 8.4%

Attribution rate (includes net loss premiums) 17.1% 14.9% 13.8%

Net premiums earned as a percentage of gross written premiums 82.9% 85.1% 87.0%

Net loss rate 111.8% 105.2% 94.9%

The commission paid as a percentage of the total insurance premiums written 1.7% 1.1% 1.4%

Commission received as a percentage of the premiums assigned 15.8% 10.1% 15.7%

Net commission percentage 6.2% 6.4% 6.9%

Net expense percentage 22.1% 21.1% 19.9%

Source: The Company

The nine-month period ending on September 30

Main Indicators
2022G 2023G
Unaudited Unaudited

Insurance revenue growth rate NA 3.8%

Insurance services expenses as a percentage of insurance revenues 5.3% 5.3%

Net expense percentage (36.4%) 84.7%

Net loss percentage 114.7% 93.8%

Attribution rate (includes net loss premiums) (16.8%) 9.6%

Commission expense percentage of written premiums 5.7% 6.4%

Source: The Company

xxiv
Statement of Financial Position

Summary of Financial Financial year ended Financial year ended Financial year ended Increase/(Decrease)
Position Statement December December December
December December
(SAR’000) 31, 2020G 31, 2021G 31, 2022G
2021G 2022G

Total Investments 243,697 201,986 152,357 (17.1%) (24.6%)

Total Assets 804,001 753,782 666,141 (6.2%) (11.6%)

Total Liabilities 516,219 540,505 535,817 4.7% (0.9%)

Net Equity 287,782 213,277 130,325 (25.9%) (38.9%)

Total Liabilities & Equity 804,001 753,782 666,141 (6.2%) (11.6%)

Source: The Company’s audited financial statements for the financial years ended on December 31, 2020G, 2021G and 2022G

Nine-month Period Ended September 30

Summary of Financial Position Statement
Increase/Decrease
(SAR’000) 2022G 2023G
Unaudited Unaudited

Total Investments 217,929 218,728 0.4%

Total Assets 567,895 577,758 1.7%

Total Liabilities 414,437 389,314 (6.1%)

Net Equity 153,458 188,444 22.8%

Total Liabilities & Equity 567,895 577,758 1.7%

Source: The Company’s’ unaudited financial statements for the nine-month period ended September 30, 2023G and compared figures of September 30, 2022G

Income Statement
Financial year Financial year Financial year Increase/(Decrease)
Summary of Income Statement
ended December ended December ended December
(SAR’000)
31, 2020G 31, 2021G 31, 2022G December 2021G December 2022G

Gross Written Premiums 379,114 438,300 475,264 15.6% 8.4%

Net Premiums Written 314,168 372,983 409,761 18.7% 9.9%

Net Premiums Earned 377,322 306,450 409,427 (18.8%) 33.6%

Total Revenue 383,637 311,078 416,040 (18.9%) 33.7%

Total Subscription Costs & Expenses (455,552) (353,715) (437,730) (22.4%) 23.8%

Net Subscription Loss (71,915) (42,637) (21,690) (40.7%) (49.1%)

Total of Other Operations Expenses (34,064) (30,064) (47,206) (11.7%) 57.0%

Total Loss Attributable to Shareholders (112,479) (74,471) (73,496) (33.8%) (1.3%)

Total Comprehensive Loss for the Year/

(107,665) (74,505) (82,952) (30.8%) 11.3%
Period
Source: The Company’s audited financial statements for the financial years ended on December 31, 2020G, 2021G and 2022G

xxv
 Nine-month Period Ended September 30 Increase/Decrease
Summary of Income Statement
(SAR’000) 2022G 2023G
September 2023G
Unaudited Unaudited

Result of Insurance Service (51,633) 22,671 (143.9%)

Net Investment Income 2,428 22,462 825.2%

Net Insurance Finance Income 2,583 1,620 (37.3%)

Net Result of Insurance & Investment (46,621) 46,753 (200.3%)

Net Income/(loss) for the Period Attributable to Shareholders (58,867) 34,986 (159.4%)
Source: The Company’s’ unaudited financial statements for the nine-month period ended September 30, 2023G and compared figures of September 30, 2022G

Statement of Cash Flow

Financial year Financial year Financial year Increase/(Decrease)
Summary of Cash Flow Statement
ended December ended December ended December
(SAR’000)
31, 2020G 31, 2021G 31, 2022G December 2021G December 2022G

Net Cash Used in Operating Activities (160,219) (124,564) (72,317) (22.3%) (41.9%)

Net Cash Generated from Investing Activities 248,452 72,359 8,357 (70.9%) (88.5%)

Net Cash Used in Financing Activities 0 (2,913) (1,291) NA (55.7%)

Source: The Company’s audited financial statements for the financial years ended on December 31, 2020G, 2021G and 2022G

Nine-month Period Ended September 30 Increase/Decrease

Summary of Cash Flow Statement
(SAR’000) 2022G 2023G
September 2023G
Unaudited Unaudited

Net Cash Used in Operating Activities (74,547) 6,881 (109.2%)

Net Cash Generated from Investing Activities 57,818 (55,243) (195.5%)

Net Cash Used in Financing Activities (1,203) (903) (25.0%)

Source: The Company’s’ unaudited financial statements for the nine-month period ended September 30, 2023G and compared figures of September 30, 2022G

xxvi
Summary of Risk Factors
Potential investors who wish to subscribe for New Shares shall be carefully consider all the information in this Prospectus, including in
particular the risk factors detailed in Section 2, “Risk Factors”, before making any investment decision regarding the subscription or trading
for the Rights Issue.

1. Risks Related to the Company’s Activity and Operations

- Risks related to insufficient capital and minimum capital requirements
- Risks related to accumulated losses
- Risks related to insufficient provisions and reserves
- Risks related to sanctions, penalties and business suspension by competent authorities
- Risks related to failure to obtain or renew the required licenses, permits and certificates
- Risks related to the inability to implement the strategy
- Risks related to credit
- Risks related to credit rating
- Risks related to potential liabilities
- Risks related to the claims management process
- Risk related to contracts with third parties
- Risks related to reinsurance
- Risks related to reinsurance concentration
- Risks related to reliance on brokers and agents
- Risks related to investment
- Risks related to the concentration of the Company’s revenues
- Risks related to non-compliance with the quality standards and specifications required by customers
- Risks of risk management policies
- Risks related to miscalculation of risks
- Risks related to cancellation or non-renewal of insurance policies
- Risks related to translation of insurance policies
- Risks related to increasing the Company’s liabilities
- Risks related to transactions with Related Parties
- Risks related to operating systems and information technology
- Risks related to lease contracts
- Risks related to litigation (lawsuits, claims, arbitration and administrative proceedings)
- Risks related to protection of trademarks
- Risks related to the current situation of Zakat and income tax
- Risks related to insufficient insurance coverage
- Risks related to natural disasters
- Risks related to reliance on non-Saudi employees and maintaining an acceptable Saudization rate
- Risks related to dependence on key personnel and attraction of competencies
- Risks related to employees’ misconduct
- Risks related to access to future financing
- Risks related to false insurance claims and other fraudulent activities
- Risks related to failure to apply loss limits or exclusions in insurance policies
- Risks related to the Company’s reputation
- Risks related to anti-money laundering and counter-terrorism financing regulations
- Risks related to the outbreak of the COVID-19 pandemic
- Expected future risks
- Risks related to not committing to the minimum number of meetings of Board committees
- Risks related to amendments to international accounting standards or the application of new international accounting standards (IFRS)
in the future

xxvii
2. Risks Related to the Market and Industry
- Risks related to withdrawal of license to undertake insurance activities
- Risks related to approvals for new products or renewal of existing ones
- Risks related to non-compliance with existing laws and regulations and/or the issuance of new laws and regulations
- Risks related to non-compliance with the Council of Health Insurance regulations
- Risks related to the regulatory environment
- Risks related to the implementation of the new Companies Law and the amended Corporate Governance Regulations
- Risks related to economic performance and insurance sector
- Risks related to the economic performance of the Kingdom
- Risks related to political and economic instability in the Middle East
- Risks related to restrictions imposed on insurance companies’ ownership
- Risks related to competition
- Risks related to the insurance market growth
- Risks related to the lack of cultural awareness of insurance and its importance
- Risks related to required reports
- Risks related to the obtainment of approvals regarding the launch of new products or renew existing ones
- Risks related to the impact of client trust’s decrease
- Risks related to lack of control over prices
- Risks related to the insurance business cycle
- Risks related to adjustments to accounting for Zakat and income tax by the Saudi Central Bank
- Risks related to Value-added Tax (VAT)
- Risks related to the imposition of new fees or taxes
- Risks related to compliance with Saudization and GOSI requirements
- Risks related to government fees applicable to the employment of non-Saudi employees
- Risks related to the lack of qualified local cadres in the insurance sector
- Risks related to currency exchange rates

3. Risks Related to Offered Securities

- Risks related to potential fluctuations in the price of the Rights Issue
- Risks related to potential fluctuations in share price
- Risks related to unprofitability or sale of Rights Issue
- Risks related to future data
- Risks related to the issuance of New Shares
- Risks related to a decrease in the demand for Rights Issue and Company’s shares
- Risks related to ownership percentage decline
- Risks related to not exercising subscription to Rights Issue in a timely manner
- Risks related to the dividend distribution to shareholders
- Risks related to speculation in Rights Issue
- Risks related to the lack of shareholders’ awareness of the trading mechanism and exercise of Rights Issue
- Risks related to suspension of trading or cancellation of the Company’s shares due to not publishing the financial statements within
the statutory period

xxviii
Table of Content

1. Terms and Definitions 1

2. Risk Factors 7

2.1 Risks Related to the Company’s Activity and Operations 7

2.2 Risks Related to the Market and Industry  23

2.3 Risks Related to Offered Securities  29

3. Company Overview and Nature of Business 32

3.1 Company Overview 32

3.2 Major Changes in the Company’s Capital 32

3.3 Company’s Main Activities 33

3.4 Founding Shareholders 33

3.5 Substantial Shareholders 34

3.6 Company’s Vision 34

3.7 Company’s Mission 34

3.8 Company’s Strategy 34

3.9 Company’s Strengths and Competitive Advantages 35

3.10 Products and Services 35

3.11 Future Products 37

3.12 Reinsurers 38

3.13 Marketing and Distribution 39

3.14 Distribution of Company’s Revenues 40

3.15 Business Interruption 41

3.16 Employees and Saudization 41

4. Organizational and Administrative structure 42

4.1 Company’s Organizational Structure 42

4.2 Board of Directors 43

4.3 Board Committees 44

4.4 Executive Management 48

4.5 Compensation and Remuneration of Board members and Senior Executives 49

4.6 Employees 49

5. Financial Information and Management Discussion and Analysis 50

5.1 Introduction 50

5.2 Directors’ Declarations for Financial Statements 50

5.3 Significant Accounting Policies 51

5.4 Operation Results 66

5.5 Statement of Financial Position 86

5.6 Statement of Cash Flows 101

5.7 Performance Indicator 104

5.8 Income Statement 104

5.9 Statement of Financial Position 112

5.10 Statement of Cash Flows 119

5.11 Capital Obligations and Other Contingent Liabilities 120

6. Use of Offer Proceeds 121

6.1 Net Offer Proceeds 121

6.2 Use of Net Offer Proceeds 121

7. Statements by Experts  125

8. Declarations of Board Members 126

9. Legal Information 127

9.1 Company Overview 127

9.2 Management 130

9.3 Corporate Governance 140

9.4 Subsidiaries and Associate Companies 140

9.5 Government Approvals, Licenses and Certificates  141

9.6 Continuing Obligations Imposed by Government Entities on the Company as the “Licensee” 146

9.7 Summary of Material Agreements 158

9.8 Trademark and Intellectual Property Rights 165

9.9 Insurance 165

9.10 Disputes and Litigations 166

9.11 Material Information that Changed since the CMA’s Approval on the Most Recent Prospectus 176

9.12 Declarations Related to Legal Information 177

10.Underwriting  178

10.1 Underwriter 178

10.2 Summary of Underwriting Arrangement 178

11.Waivers 179

12.Information Related to Shares and Terms and Conditions of the Offering 180

12.1 The Offering 180

12.2 How to Apply for Subscription to Rights (New Shares) 180

12.3 Subscription and Application Form 180

12.4 Trading Period, Offering Period, and Rump Offering Period 181

12.5 Eligible Persons not participating in the Subscription of the New Shares 182

12.6 Allocation Refund 182

12.7 Payment of Compensation and Refund 182

12.8 Supplementary Prospectus 182

12.9 Suspension or Cancellation of the Offering 182

 12.10 Restrictions on trading in Rights 183

12.11 Questions and Answers on Rights Issue 183

12.12 Trading of New Shares 185

12.13 Decisions and Approvals Pursuant to Which the New Shares Will Be Offered 186

12.14 Miscellaneous Items 186

12.15 Statement of Any Existing Arrangements to Prevent Disposal of Certain Shares 186

13.Change in the Share Price as a Result of Capital Increase 187

13.1 Change in the Share Price as a Result of the Capital Increase 187

13.2 The Method of Calculating the Share Price as a result of the Capital Increase 187

14.Subscription Declarations 188

14.1 Overview of the Subscription Applications and Undertakings  188

14.2 Allocation Processes 188

14.3 Saudi Tadawul Group (Tadawul) 188

14.4 Trading the Company Shares in the Saudi Stock Exchange 189

15.Documents Available for Inspection 190

15.1 The Company’s Bylaws and Other Constituent Documents 190

15.2 Approvals Related to the Rights Issue 190

15.3 All reports, letters and other documents, value estimates or statements by any expert and any part of
which is extracted or referred to in the Prospectus 190
Tables Index

Table No. (1): Gross Written Premiums (GWP) xxi

Table No. (2): Insurance Market Depth to GDP xxii

Table No. (3): Insurance Market Depth to Non-oil GDP xxii

Table No. (4): Insurance Market Density xxii

Table No. (5): Insurance Sector Workforce in the Kingdom of Saudi Arabia xxiii

Table No. (6): Financial Allocations 8

Table No. (7): Sanctions and Penalties 9

Table No. (8): Transactions with Related Parties 17

Table No. (9): Ownership Structure Upon Incorporation 33

Table No. (10): Summary of the Company’s Products and Services 35

Table No. (11): Reinsurers 38

Table No. (12): The Company’s Commercial Registers  39

Table No. (13): Distribution of Revenues According to Insurance Types 40

Table No. (14): Distribution of Revenues According to Geographical Regions 40

Table No. (15): Distribution of Revenues According to Classification of Insurance Classes 40

Table No. (16): Composition of the Board of Directors 43

Table No. (17): Members of the Audit Committee 44

Table No. (18): Members of the Nomination and Remuneration Committee 45

Table No. (19): Members of the Risk Committee 46

Table No. (20): Members of the Executive Committee 47

Table No. (21): Members of the Investment Committee 48

Table No. (22): Members of the Executive Management  48

Table No. (23): Compensation and Remuneration of Board members and Senior Executives 49

Table No. (24): Performance Indicator 66

Table No. (25): Income Statement 66

Table No. (26): Gross Written Premiums 72

Table No. (27): Incurred Reinsurance Premiums and Net Loss Premiums 74

Table No. (28): Net Written Premiums 75

Table No. (29): Net Earned Written Premiums 75

Table No. (30): Reinsurance Commissions 76

Table No. (31): Total and Reinsurers Share of Paid Claims  77

Table No. (32): Net Claims and Other Benefits Incurred 79

Table No. (33): Policy Acquisition Costs 80

Table No. (34): Other Underwriting Expenses 81

Table No. (35): General and Administrative Expenses 82

Table No. (36): Statement of Financial Position 86

Table No. (37): Cash and Cash Equivalents 88

Table No. (38): Insurance Premiums and Balance Receivables  89

Table No. (39): Age of Insurance Premiums and Receivables 90

Table No. (40): Deferred Policy Acquisition Costs  91

Table No. (41): Prepaid Expenses and Other Assets 92

Table No. (42): Property and Equipment 93

Table No. (43): Right-of-use Assets 94

Table No. (44): Intangible Assets 94

Table No. (45): Accrued Expenses and Other Liabilities 95

Table No. (46): Unearned Reinsurance Commission 97

Table No. (47): Due to Related Parties and Transactions with Related Parties 98

Table No. (48): Employee Benefits Obligations 99

Table No. (49): Shareholders’ Equity/Property Rights 100

Table No. (50): Statement of Cash Flows 101

Table No. (51): Performance Indicator 104

Table No. (52): Income Statement 104

Table No. (53): Insurance Revenues 106

Table No. (54): Insurance Services Expenses 107

Table No. (55): Claims Incurred and Other Direct Expenses 108

Table No. (56): Net Revenues/(Expenses) of Reinsurance Contracts 110

Table No. (57): Other Operating Expenses 111

Table No. (58): Statement of Financial Position 112

Table No. (59): Cash and Cash Equivalents 113

Table No. (60): Investments 113

Table No. (61): Prepaid Expenses and Other Assets 114

Table No. (62): Property and Equipment 115

Table No. (63): Right-of-use Assets 115

Table No. (64): Intangible Assets 115

Table No. (65): Accrued Expenses and Liabilities 116

Table No. (66): Transactions with Related Parties 117

Table No. (67): Employee Benefits Obligations 117

Table No. (68): Zakat Due 118

Table No. (69): Income Commission Payable to the Saudi Central Bank  118

Table No. (70): Statement of Cash Flows 119

Table No. (71): Suggested Use of the Offer Proceeds 121

Table No. (72): The expected timetable for using the Offer Proceeds to replace the technical system for insurance and financial
operations122

Table No. (73): The Company margin and solvency cover 123

Table No. (74): Expected Contribution of the Net Offer Proceeds to Maintain Financial Solvency Requirements 123

Table No. (75): The expected timetable for using the Offer Proceeds 124

Table No. (76): Board of Directors – Current Session 130

Table No. (77): Mandatory Positions of the Board of Directors 131

Table No. (78): Remuneration of the Board and Senior Executives 132

Table No. (79): Board Meetings 132

Table No. (80): Audit Committee Members 133

Table No. (81): Audit Committee Meetings 134

Table No. (82): Nominations and Remuneration Committee Members 135

Table No. (83): Nominations and Remuneration Committee Meetings 136

Table No. (84): Members of the Risk Committee 136

Table No. (85): Risk Committee Meetings 137

Table No. (86): Members of the Executive Committee 137

Table No. (87): Executive Committee Meetings 138

Table No. (88): Members of the Investment Committee 138

Table No. (89): Investment Committee Meetings 139

Table No. (90): Executive Management 139

Table No. (91): Licenses, Certificates and Approvals Related to the Head Office 141

Table No. (92): Licenses, Certificates and Approvals Related to the Company’s Branches 142

Table No. (93): Central Bank Approvals to Open and Close Points of Sale and Branches 144

Table No. (94): Summary of Violations of The Ministry of Human Resources and Social Development  147

Table No. (95): Municipal Licenses and Salamah Certificates 148

Table No. (96): Summary of the CMA Violations  150

Table No. (97): The Most Important Provisions of the Corporate Governance Regulations 151

Table No. (98): The Saudi Central Bank Violations  155

Table No. (99): CHI Violations  157

Table No. (100): Related Parties’ Contracts and Transactions 158

Table No. (101): Related Parties’ Transactions According to the Board’s Report 159

Table No. (102): Summary of Lease Contracts 162

Table No. (103): Trademark Registration Certificate 165

Table No. (104): Summary of Lawsuits and Disputes Filed Against the Company as the Defendant 166

Table No. (105): Lawsuits in Which the Company Has Taken the Status of the Defendant 175

Figures Index

Figure No. (1): The Company’s Organizational Structure 42

1. Terms and Definitions

Term Definition

“Al Sagr” or the

“Company” or the Al Sagr Cooperative Insurance Company
“Issuer”

Underwriting Agreement Underwriting agreement between the Company and the Underwriter

Procedures and
Instructions Related to
Issued by the CMA Board pursuant to Resolution No. (2013-48-4) dated 15/01/1435H (corresponding to 18/11/2013G) based on
Listed Companies with
the Capital Market Law issued by Royal Decree No. (M/30) dated 02/06/1424H (corresponding to 31/07/2003G) and amended by
Accumulated Losses
Authority Board Resolution No. (8-5-2023) dated 25/06/1444H (corresponding to 18/01/2023G).
Reaching (20%) or More
of Their Share Capital
Total premiums for insurance contracts written during a specified period (whether assigned or not) without deducting the waived
Gross Written Premiums
premiums.
Technical Reserves/ Amounts allocated by the Company to cover expected losses resulting from policies for a special type of insurance and its
Allocations resulting financial obligations.
Insurance Premium It is the amount needed by an insurer if the unearned premiums collected may not be sufficient to meet future claims and expenses
Deficiency Reserve as determined by the actuary. It is based on the expected loss ratio for the remaining portion of the risks and usually arises when
(IPDR) the actuary believes that the prices of the policies are insufficient to cover future claims related to them.
The executive management team or senior executives of Al Sagr Cooperative Insurance Company includes, without limitation,
the CEO, Commercial Activity Manager, Human Resources and Support Services Manager, Risk Manager, Financial Manager,
Senior Management
Technical Manager, Actuarial Manager, Customer Care Manager, and Information Technology Manager, Director of Cybersecurity,
(or Company’s
in addition to the Compliance Director, the Director of Internal Audit, the Director of Legal Affairs, and occupants of any other
Management)
approved positions in other administrations or departments as indicated in the organizational structure (for more details, please
see Section 4 “Organizational and Administrative structure”).

New Shares Sixteen million (16,000,000) ordinary shares, which will be issued to increase the Company’s capital.

The Company’s current shares amount to fourteen million (14,000,000) ordinary shares, with a nominal value of ten (10) Saudi
Current Shares
Riyals per share.

Rump Shares The shares which were not subscribed for during the Subscription Period.

Eligible Persons All holders of Rights Issue, whether Registered Shareholders or persons who purchased Rights Issue during the Trading Period.

According to the Rules of the Offer of Securities and Continuing Obligations, and the Glossary of Defined Terms Used in The
Regulations and Rules of the CMA, Related Parties are considered as the following:
1. affiliates of the Issuer except for wholly-owned companies;
2. substantial shareholders of the Issuer;
Related Parties 3. directors and senior executives of the Issuer;
4. directors of affiliates of the Issuer;
5. directors and senior executives of substantial shareholders of the Issuer;
6. any relatives of persons described at (1), (2), (3) or (5) above;
7. any company controlled by any person described at (1), (2), (3), (5) or (6) above.
The process by which the insurance company or reinsurer insures or reinsures another insurer or reinsurer (the ceding company)
Reinsurance against all or part of the insurance or reinsurance risks that the ceding company undertakes to cover, under one or more insurance
policies.

Optional Reinsurance An optional, case-by-case method of reinsurance in which the reinsurer has the option to accept or reject the risks offered to him.

The method of distributing insurance amounts (whether premiums or claims) between the Company and the reinsurer at a specific
Pro rata Reinsurance
and agreed upon percentage.

Unearned Premiums The portion of written premiums that covers risks relating to subsequent financial periods.

Assigned Payments Premiums waived for the benefit of reinsurance companies within the framework of reinsurance operations.

A legal document or contract issued by the Company to the insured stating the contract’s terms regarding loss and damage covered
Insurance Policy
by the policy, in exchange for a premium paid by the insured.

1
 Term Definition

The Saudi Central Bank (formerly the Saudi Arabian Monetary Agency) is the responsible entity for regulating the financial
Saudi Central Bank or
sectors authorized to operate in the KSA, such as banks, insurance companies, finance companies, exchange institutions, and
SAMA
credit information companies.
The license granted to the Company by the Saudi Central Bank pursuant to No. (TMN/13/20083) dated 23/03/1429H
Saudi Central Bank (corresponding to 31/03/2008G) to allow the Company to carry out insurance activity within (1) general insurance and (2) health
License insurance. The Company renewed this license on 14/11/1443H (corresponding to 13/06/2022G) for a period of three years starting
on 20/03/1444H (corresponding to 16/10/2022G) and ending on 19/03/1447H (corresponding to 11/09/ 2025G).
Instructions
Issued by the CMA Board pursuant to Resolution No. (1-199-2006) dated 18/07/1427H (corresponding to 12/08/2006G) and
for Companies
amended pursuant to Resolution No. (3-79-2023) dated 19/02/1445H (corresponding to 04/09/2023G).
Announcements

Litigation Recourse to courts or judicial committees to reach a settlement of a dispute.

Nationalization /
Saudization requirements applied in the KSA regarding the labor market.
Saudization
The General Assembly attended by the shareholders pf the Company in accordance with the provisions of the Companies Law and
General Assembly
the Company’s Bylaws. The General Assembly can be ordinary or extraordinary.
Ordinary General
The Ordinary General Assembly of the Company’s Shareholders. (OGA)
Assembly
The Extraordinary
The Extraordinary General Assembly of the Company’s Shareholders (EGA).
General Assembly
As per the Glossary of Defined Terms Used in The Regulations and Rules of the CMA, the Public are persons other than the
following:
1. Affiliates of the issuer;
2. Substantial shareholders of the issuer;
3. Directors and senior executives of the issuer;
The Public
4. Directors and senior executives of the issuer’s affiliates;
5. Directors and senior executives of substantial shareholders of the issuer;
6. Any relatives of persons described at (1), (2), (3), (4) or (5) above;
7. Any company controlled by any persons described at (1), (2), (3), (4) or (5) or (6) above.
8. Persons acting in concert, with a collective shareholding of (5%) or more of the class of shares to be listed.
Rights are issued as tradable securities that grant their holders the priority to subscribe to the New Shares offered, upon approval
of the capital increase. All Shareholders registered in the Company’s Register are entitled to receive such Rights, noting that the
Rights Issue may be traded during the Trading period. Each right grants its holder eligibility to subscribe for one New Share at
Rights Issue
the Offer Price. Rights Issue will be deposited within two days from the date of the EGA’s meeting approving the capital increase.
The Rights will appear in the Registered Shareholders portfolios under a new symbol specifying the Rights Issue. Registered
Shareholders will be notified of the deposit of Rights in their portfolios.

The Government The Government of the Kingdom of Saudi Arabia, and the word “Governmental” shall be interpreted accordingly.

Insurance Policyholders The person who concludes an insurance contract and is entitled to financial compensation for certain damages.

A consultant who prepares statistical theories and various possibilities on the basis of which services are priced, obligations are
Actuarial Expert
evaluated, and s are calculated.
Insurance Claims
A legal entity that studies and evaluates losses and negotiates settlements on behalf of the insurance company.
Settlement Expert
The National Strategic Economic Program, which aims to reduce dependence on oil and the petrochemical industry, diversify the
Vision 2030
Saudi economy, and develop services.
Riyal, Saudi Riyal or the
The official currency of the Kingdom of Saudi Arabia.
Riyal
It is the price at which the right is traded, noting that such price is set through the offer and demand mechanism; therefore, it may
Right Trading Price
differ from the Indicative Value of the Right.
Offer / Subscription
Ten (10) Saudi Riyals per share.
Price
It is the period set to present the result of the establishment’s activity. Its beginning and ending are specified in the incorporation
Financial Year(s) contract or the Company’s Bylaws, noting that the Company’s financial year ends on December 31 of each Gregorian calendar
year.
The Saudi Stock
Exchange Market,
the Capital Market or The Saudi Stock Exchange for shares trading.
the Stock Market or
the Market

Person A natural or legal person

2
 Term Definition

Security Depository
A closed joint stock Company wholly owned by the Saudi Tadawul Group (Tadawul), established in 2016 under the Saudi
Center Company
Companies Law issued by Royal Decree No. M/3 on 28/01/1437H (corresponding to 11/11/2015G).
(“Edaa”)
Social Insurance
Certificate issued by the General Organization for Social Insurance in the Kingdom of Saudi Arabia.
Certificate

Zakat Certificate Certificate issued by the Zakat, Tax and Customs Authority in the Kingdom of Saudi Arabia.

The net proceeds of the offering, after deducting offering expenses, will reach an amount of one hundred and fifty-three million
Net Offer Proceeds and seventy-five thousand (153,075,000) Saudi Riyals (for more information, please refer to Section No. (6) “Use of Offer
Proceeds”).
On 02/05/1438H (corresponding to 30/01/2017G), the Council of Ministers decided to approve the unified agreement for value-
added tax for the countries of the Gulf Cooperation Council, which came into effect starting from January 1, 2018G, as a new
tax added to the system of taxes and other fees that must be implemented by specific sectors in the Kingdom and in the Gulf
Cooperation Council countries. The amount of this tax is (5%), and a number of products have been excluded from it (such as
basic foods and services related to health care and education). The Board of Directors of the Zakat, Tax and Customs Authority No.
Value-added Tax (VAT)
(20-3-2) dated 17/10/1441H (corresponding to 09/06/2020G) decided to amend the VAT Law to become (15%) starting from July
1, 2020G, according to this his powers based on Article Five (5) of the Zakat, Tax and Customs Authority issued by Ministerial
Resolution No. (465) dated 20/07/1438H (corresponding to 17/04/2017G) and after reviewing Royal Order No. (A/638) dated
15/10/1441H (corresponding to 07/06/2020G) issued regarding amending Value-added Tax Law to allow the increase of the basic
tax rate to (15%) starting July 1, 2020G.
Regulations for Branches
and Points of Sale
Annual Expansion Regulations for Branches and Points of Sale Annual Expansion for Insurance and/or Reinsurance, Brokerage, and Agency
for Insurance and/or Companies issued by the Saudi Central Bank on 25/07/1437H (corresponding to 02/05/2016G).
Reinsurance, Brokerage,
and Agency Companies

Insurance Depth The ratio of total insurance premiums written to the gross domestic product.

Reinsurance
The commission received as a result of reinsurance of another insured against all or part of the risks of insurance or reinsurance.
Commissions
The period starting from Tuesday 26/12/1445H (corresponding to 02/07/2024G) and ended Sunday 08/01/1446H (corresponding
Offering Period
to 14/07/2024G).
The period from 10:00 a.m. on Wednesday 11/01/1446H (corresponding to 17/07/2024G) to 5:00 p.m. on Thursday 12/01/1446H
Rump Offering Period
(corresponding to 18/07/2024G).
Glossary of Defined
The Glossary of Defined Terms Used in the Regulations and Rules of the CMA pursuant to Resolution No. (4-11-2004) dated
Terms Used in the
20/08/1425H (corresponding to 04/10/2004G) based on the CMA Law issued by Royal Decree No. (M/30) dated 02/06/1424H,
Regulations and Rules of
amended by CMA Board Resolution No. (1-101-2023) dated 08/04/1445H (corresponding to 23/10/2023G).
the CMA
Listing rules issued by the Saudi Stock Exchange (Tadawul) and approved by CMA Board Resolution No. (3-123-2017), dated
09/04/1439H (corresponding to 27/12/2017G), amended by Resolution No. (1-104-2019), dated 01/02/1441H (corresponding
to 30/09/2019G), amended by Resolution No. (01/22/2021) dated 12/07/1442H (corresponding to 24/02/2021G), amended by
Listing Rules
Resolution No. (1-19-2022) On 12/07/1443H (corresponding to 13/02/2022G), amended by Resolution No. (1-52-2022) dated
12/09/1443H (corresponding to 13/04/2022G), amended by Resolution No. (3-96-2022) dated 10/02/1444H (corresponding to
06/09/2022G), and amended by Resolution No. (1-108-2022) dated 23/03/1444H (corresponding to 19/10/2022G).
Rules on the Offer of Securities and Continuing Obligations issued by the Board of the Capital Market Authority (CMA), pursuant
Rules on the Offer
to Resolution No. (3-123-2017) dated 09/04/1439H (corresponding to 27/12/2017G), according to the Capital Market Law issued
of Securities and
by Royal Decree No. M/30 dated 06/02/1424H, (corresponding to 31/07/2003G) as amended by the CMA Board Resolution No.
Continuing Obligations
(8-5-2023) dated 25/06/1444H (corresponding to 18/01/2023G).
In this Prospectus, it means the audited financial statements for the fiscal years ended on December 31, 2020G, 2021G, and
Financial Statements
2022G, and the unaudited financial statements for the nine-month period ended September 30, 2023G.
The indicative value of a Right reflects the difference between the market value of the Company’s share during the Trading Period
Right Indicative Value
and the Offer Price.

Insurance Density Per capita spending on insurance or average insurance spending per capita.

Outsourcing Regulation
for Insurance and
Reinsurance Companies Issued by the Saudi Central Bank on 03/01/1434H (corresponding to 17/11/2012G).
and Insurance Service
Providers
Implementing
Issued by the CMA Board pursuant to Resolution No. (8-127-2016) dated 16/01/1438H (corresponding to 17/10/2016G) based on
Regulations of the
the Companies Law issued by Royal Decree No. (M/3) dated 28/01/1437H amended by the Authority Board Resolution No. (8-
Companies Law for
5-2022) dated 25/06/1444H (corresponding to 18/01/2023G) based on the Companies Law issued by Royal Decree No. (M/132)
Listed Joint Stock
dated 01/12/1443H (corresponding to 30/06/2022G).
Companies

3
 Term Definition

The Corporate Governance Regulations in KSA issued by the Board of the CMA under Resolution No. (8-18-2017G) dated
Corporate Governance 16/05/1438H (Corresponding to 13/02/2017G) based on the Companies Law issued by Royal Decree No. (M/3) dated
Regulations 28/01/1437H and amended by CMA Board Resolution (8- 5-2023G), dated 25/06/1444H (corresponding to 18/01/2023G), based
on the Companies Law issued by Royal Decree No. (M/132) dated 12/01/1443H.
Insurance Companies
Corporate Governance Insurance Corporate Governance Regulations issued by the Saudi Central Bank on 08/01/1437H (corresponding to 21/10/2015G).
Regulations
Underwriter and Lead
Albilad Investment Company (Albilad Capital).
Manager
The Company’s Board of Directors elected by the General Assembly of Shareholders in accordance with the provisions of the
The Board, The Board of
Company’s Bylaws and the requirements of the competent authorities related to the membership of the BOD of joint stock
Directors or The Board
companies (JSC) (in particular the requirements of the CMA and the Central Bank) recognized under the regulations in force in
Members
the KSA, and whose names appear on page (iv).
Council of Health
A government body to oversee the implementation of the Cooperative Health Insurance Law.
Insurance

Portfolios An investment instrument that includes a number of assets.

Technical provisions are calculated in accordance with the requirements of the Saudi Central Bank and applicable accounting
Technical Provisions
standards, after being approved and adopted by the actuary, in addition to the Company’s obligations.
Head Office/ The Company’s Head Office is located in the region of Dammam - First Floor - ATCO Building - King Khalid Street - Postal
Headquarters Code: Al Khobar 31952 - P.O. Box 3501.

Registered Shareholder The investor registered in the issuer’s securities ownership registry.

Shareholders who own (5%) or more of the Company’s shares. As of the date of this Prospectus, the Company has one substantial
Substantial Shareholders shareholder, Al Sagr National Insurance Company (an Emirati closed joint stock company), which owns (26%) of the Company’s
shares.
It is the insurance and/or reinsurance company that accepts reinsurance from another insurance company for all or some of the
Reinsurer
risks it bears.
Al Sagr National It is an Emirati public joint stock company registered in the Commercial Registry under number (41370) with a current capital of
Insurance Company (230,000,000) UAE Dirhams.

Eligible Shareholders Shareholders registered in the Company’s Shareholder Register at the end of the trading day following the Eligibility Date.

Founding shareholders They are the Company’s Founding Shareholders whose names appear in Table No. (9).

Albilad Investment Company (Albilad Capital), which was appointed by the Company as a Financial Advisor and Lead Manager
Financial Advisor
in relation to the Rights Issue as tradable securities.

Eligibility Ratio Result of dividing the number of new shares by the number of the Company’s current shares.

International Financial
International Financial Reporting Standards adopted in the KSA, and other standards and issuances issued by the Saudi
Reporting Standards
Organization for Auditors and Accountants (International Financial Reporting Standards).
(IFRS)
Any eligible shareholder who subscribes or submits an application to subscribe to the Rights Issue in accordance with the terms
Subscriber
and conditions of the Company’s issue of shares.
The Kingdom, or Saudi
The Kingdom of Saudi Arabia.
Arabia
It includes a group of institutions, which are as follows:
a. the Government of the Kingdom or any supranational authority recognised by the CMA or the depository center
(Edaa);
b. companies fully owned by the government or any government entity, either directly or through a portfolio managed
by a Capital Market Institution authorised to carry on managing business;
c. institutional companies acting on their own account;
d. Capital Market Institution authorised to deal in securities as principal;
e. clients of a Capital Market Institution by the Authority to conduct managing activities provided that the offering is
made to that capital market institution and that all relevant communications are made through it. The Capital Market
Institutional Investors Institution must have been appointed on terms which enable it to make decisions concerning the acceptance of an
offer of securities on the client’s behalf without obtaining prior approval from the client;
f. public and private funds that invest in securities listed on the Exchange;
g. any legal persons allowed to open an investment account in the Kingdom and an account at the depositary center
(Edaa);
h. companies owned by the government either directly or through a portfolio privately managed;
i. Gulf companies and funds if allowed by the terms and conditions of the fund;
j. any registered person with the Capital Market Institution if the offering is made by the capital market institution itself;
k. qualified investors; and
l. any other persons prescribed by the CMA.

4
 Term Definition

General Organization for

The General Organization for Social Insurance in the Kingdom of Saudi Arabia.
Social Insurance
The insurance company that accepts insurance contracts directly from the insured and undertakes compensation for the risks to
Insurer
which the insured is exposed.

Insured The natural or legal person who concludes an insurance contract.

Prospectus This document prepared by the Company concerning the Offering of Rights Shares.

The Saudization program (Nitaqat) was approved pursuant to Resolution No. (4040) of His Excellency the Minister of
Labor dated 12/10/1432H (corresponding to 10/09/2011G) based on Ministerial Resolution No. (50) dated 21/04/1415H
(corresponding to 27/09//1994G). The Ministry of Human Resources and Social Development in the Kingdom launched the
program to provide incentives for establishments to employ Saudis. The program evaluates the performance of the facility on
the basis of specific ranges (Platinum, Green, and Red) according to the activity and sector under which the Company falls.
On 11/01/1442H (corresponding to 23/05/2021 G), the Ministry of Human Resources and Social Development launched the
Nitaqat developed “Nitaqat” program (a Saudi nationalization scheme), which offers three main advantages: The first: a clear vision and
transparent Saudization plan for the next three years in order to increase organizational stability in the private sector. The second:
the direct relationship between the number of workforce and the required Saudization percentages for each facility is based on a
linear equation that is proportionally related to the number the facility’s workforce, instead of the current Saudization percentage
system, based on the classification of establishments into specific and fixed sizes. The third: simplifying the design of the program
and improving the customer experience by integrating the categories of activities with common characteristics, to be 32 instead of
85 activities in “Nitaqat”. This program will also contribute to providing more than (340,000) jobs until 2024G.
The Company’s Bylaws and their subsequent amendments are approved by the founding General Assembly. The lastest
amendment was made according to the EGA’s Resolution dated 28/03/1445H (corresponding to 13/10/2022G). The Bylaws
Bylaws were also reviewed and approved by the Ministry of Commerce and Investment (Operations Department) on 09/07/1444H
(corresponding to 31/01/2023G), and can be reviewed either at the Company’s headquarters or on its website (Tadawul website
/ the Company’s profile page).

Tadawul System The automated system for trading of securities on the Saudi Stock Exchange.

Law of Commercial The Law of Commercial Register issued by Royal Decree No. (M/1) dated 21/02/1416H (19/07/1995G), and its implementing
Register regulations issued pursuant to Ministerial Decree No. (1003) dated 21/09/1416H (corresponding to 11/02/1996G).

Capital Market Law The Capital Market Law issued by Royal Decree No. (M/30) dated 06/02/1424H (corresponding to 31/07/2003G).

The Companies Law in the Kingdom of Saudi Arabia issued pursuant to Royal Decree No. (M/132) dated 01/12/1443H
Companies Law
(corresponding to 30/06/2022G) and Cabinet Resolution No. (678) dated 29/11/1443H (corresponding to 28/06/2022G).
The Cooperative Health The Cooperative Health Insurance Law No. (71) dated 27/04/1420H (corresponding to 11/08/1999G) issued by Royal Decree No.
Insurance Law (M/10) dated 01/05/1420H (corresponding to 13/08/1999G).
The Saudi Labor Law pursuant to Royal Decree No. (M/51) dated 23/08/1426H (corresponding to 27/09/2005G), and any
Labor Law
amendments thereto and the decisions and regulations issued in implementation of its provisions.
The Cooperative In-
The Cooperative Insurance Companies Control Law issued by Royal Decree No. (M/32) dated 02/06/1424H (corresponding to
surance Companies
31/07/2003G), amended by Royal Decree No. (M/30) dated 27/05/1434H (corresponding to 08/04 /2013G), amended by Royal
Control Law
Decree No. (M/12) dated 23/01/1443H (corresponding to 01/09 /2021G) and its implementing regulations issued by the Minister
and its Implementing
of Finance Resolution No. (1/569) dated 01/03/1425H (corresponding to 20/04/2004G).
Regulations

H Hijri calendar

G Gregorian calendar

Solvency Margin The extent to which the Company’s assets can be converted into cash (beyond its liabilities).

The Insurance Authority was established pursuant to Ministerial Resolution No. (85) dated 28/01/1445H (corresponding to
15/08/2023G) and officially began its work on 09/05/1445H (corresponding to 23/11/2023G) to regulate, supervise and control
the insurance sector in the KSA. The Insurance Authority will assume the powers related to the insurance sector that were
Insurance Authority
exercised before its establishment by the Saudi Central Bank and the Council of Health Insurance according to a transitional
plan, provided that the laws, regulations, rules and instructions issued by the Central Bank and the Council of Health Insurance
related to regulating the insurance sector will continue to be enforced until further instructions are issued to amend or copy them.
The Zakat, Tax and Customs Authority in the Kingdom of Saudi Arabia (The General Authority for Zakat and Tax (GAZT) or
the Department of Zakat, and Tax formerly) is one of the government agencies that are organizationally linked to the Minister
Zakat, Tax and Customs
of Finance, and it is the body entrusted with the work of levying zakat and tax collection. On 22/09/1442H (corresponding to
Authority
04/05/2021G), the Council of Ministers approved the merging of the General Authority of Zakat and Tax (GAZT) and the General
Authority of Customs ((GAC) to form the “Zakat, Tax and Customs Authority (ZATCA)”.
The Saudi Organization
for Chartered and The Saudi Organization for Chartered and Professional Accountants in the Kingdom of Saudi Arabia. (Formerly the Saudi
Professional Accountants Organization for Certified Public Accountants).
(SOCPA)
Capital Market
The Capital Market Authority in the Kingdom of Saudi Arabia.
Authority or Authority

5
 Term Definition

A legal document or contract issued by the Company to the insured stating the terms of the contract to compensate the insured for
Insurance Policy
the loss and damage covered by the policy in exchange for a premium paid by the insured.
The Unified Compulsory Issued by the Saudi Central Bank pursuant to Governor’s Resolution No. (2/S/444) dated 23/06/1444H (corresponding to
Motor Insurance Policy 16/01/2023G) based on the powers granted to the Saudi Central Bank under the Cooperative Insurance Companies Control Law.

Ministry of Commerce The Ministry of Commerce in the Kingdom of Saudi Arabia (formerly the Ministry of Commerce and Investment).

Ministry of Interior The Ministry of Interior in the Kingdom of Saudi Arabia.

The Ministry of Municipal and Rural Affairs and Housing in the Kingdom of Saudi Arabia. On 11/06/1442H and 24/01/2021G,
Ministry of Municipal &
pursuant to Royal Decree No. (A/322) that stipulated the merging of the “Housing Ministry” and the “Ministry of Municipal and
Rural Affairs & Housing
Rural Affairs”, and amendment of its name to become the “Ministry of Municipal, Rural Affairs and Housing”.
Ministry of Human
The Ministry of Human Resources and Social Development in the Kingdom of Saudi Arabia (Formerly the Ministry of Labor
Resources and Social
and Social Development).
Development
Intermediaries/Brokers/
A Capital Market Institutions licensed by the CMA to engage in the activity of dealing in securities as agents.
Agents
A legal person who, in return for a certain fee, represents existing or potential insured in attracting and negotiating insurance
Insurance Brokers
contracts.

Insurance Agency A legal person who, in return for a commission, represents the insurer to attract, negotiate and conclude insurance contracts.

A business day means any day except any Friday, any Saturday, or any day which is a federal legal holiday in KSA or any day on
Business Day
which banking institutions are authorized or required by law or other governmental action to close.

6
2. Risk Factors

In addition to other information included in this Prospectus, all prospective investors should carefully consider all risk factors described below,
including in particular the risk factors outlined below, prior to making the decision of purchasing the shares offered for subscription. However,
the risks described below may not include all risks that the company may face. It is possible that there are additional risk factors that are not
currently known to the company, that may affect its operations. The Board Members declare that they are not aware of any other material risks
than those set out below that may have an adverse effect on the Company’s activity and its financial position, as of the date of this Prospectus.

Investing in the offered shares is only suitable for investors who are able to assess the risks and benefits of such an investment and who have
sufficient resources to bear any loss that may result from such an investment. A prospective investor who is doubtful about investing in the New
Shares should refer to a financial advisor licensed by the CMA for advice about investing in the shares of this Offering.

The BOD’s Members also acknowledge, to the best of their knowledge and belief, that there are no material risks that may affect the investors’
decision as of the date of this Prospectus.

In the event of the occurrence of one of the risks that the Company’s management (“the Management”) currently believes to be important, or
any other risks that the Management could not identify or which it believes to be immaterial, if it occurs or becomes material, the Company’s
activity, its financial status, business results, cash flow and future expectations may be adversely and substantially affected. The occurrence of
one or some of these risks may lead to a decrease in the shares’ prices in the market and to investors losing part of or all of their investments
in the New Shares.

It should be noted that the risks and uncertainties as outlined below, are not enumerated according to their importance. Additional risks and
uncertainties, including those unknown or deemed non-essential at the present time, may have the effects described above.

2.1 Risks Related to the Company’s Activity and Operations

2.1.1 Risks related to insufficient capital and minimum capital requirements

According to Articles (66) and (68) of the Implementing Regulations of the Cooperative Insurance Companies Control Law issued by the Saudi
Central Bank, insurance companies shall maintain a margin of solvency for various types of business. According to Paragraph (a) of Clause (2)
of Article (68) of the Implementing Regulations, if the solvency margin falls between (75%) and (100%) of the required solvency margin, the
Company will have to amend this percentage to become at least (100%) during the next quarter.

According to Clause (2) of Article (68) of the Regulations stipulates a series of measures to rectify the insurance companies’ situation as
follows:

1. Increase the Company’s capital.

2. Adjustment insurance premiums.
3. Reduce costs.
4. Stop underwriting business.
5. Assets liquidation.
6. Any other measures deemed appropriate by the Company and approved by the Central Bank.

The Company’s solvency margin reached (177.5%), (120.8%), (72.6%) and (100.3%) as of December 31, 2020G, 2021G and 2022G, and
the nine-month period ended September 30, 2023G, respectively. On 28/02/1445H (corresponding to 13/09/2023G), the Board of Directors
recommended to increase the Company’s capital by offering Rights Issue Shares at a value of one hundred sixty million (160,000,000) Saudi
Riyals, subject to obtaining all necessary statutory approvals and the approval of the EGA. The Company obtained the non-objection of the
Insurance Authority to increase its capital as per letter No. (134-23) dated 26/05/1445H (corresponding to 10/12/2023G).

The Company aims to increase its capital by offering Rights Issue Shares to enhance and maintain the solvency margin required by the Saudi
Central Bank (kindly refer to Section No. 6 “Use of Offer Proceeds”).

In the event that the Company is unable to meet the required solvency requirements, the Central Bank will require it to appoint an advisor
(to provide advice as deemed necessary) or withdraw its license and prevent it from selling its insurance products if it does not improve its
business’s financial status within a period specified by the Saudi Central Bank, which will negatively and materially affect the Company’s
business, results of operations, financial status and future prospects.

7
2.1.2 Risks related to accumulated losses
The Company had previously announced on 09/02/1444H (corresponding to 05/09/2022G) that its accumulated losses had reached (65%) of
the capital and amounting to (260,082,904) Saudi Riyals. It is to be noted that according to Article (5) of the “Procedures and Instructions
Related to Listed Companies with Accumulated Losses amounting to (20%) or more of their Share Capital” issued by the CMA pursuant to
Resolution No. (4-48-2013) dated 15/01/1435H (corresponding to 18/11/2013G) based on the Capital Market Law issued by Royal Decree
No. (M/30) dated 02/06/1424H (corresponding to 31/07/2003G) amended by the CMA Board Resolution No. (8-5-2023) and the date of
25/06/1444H (corresponding to 18/01/2023G) - a company whose accumulated losses amount to (50%) or more of its capital must disclose
to the public immediately and without delay. The CMA adds a mark next to the Company’s name on the Market’s website, symbolizing
that the accumulated losses have reached (50%) or more of its share capital as soon as the Company’s announcement is issued. After this
announcement, stating that accumulated losses reached (50%) or more of the capital, the Company should announce (1) the last date on which
the BOD can invite the EGA to meet, and the last day of the EGA to address the accumulated losses, (2) the BOD’s recommendation to the
EGA regarding its accumulated losses as soon as it is issued.

The Board of Directors announced on 09/02/1444H (corresponding to 05/09/2022G) that it had invited the EGA to convene and take the
required legal measures. On 24/02/1444H (corresponding to 20/09/2022G), the Company received the Saudi Central Bank Letter No.
(44015739) containing its approval to reduce the Company’s capital by two hundred and sixty million (260,000,000) Saudi Riyals, so that
the capital becomes one hundred and forty million (140,000,000) Saudi Riyals, and then on 25/02/1444H (corresponding to 21/09/2022G the
Company submitted a file to the CMA requesting approval to reduce the capital on 25/02/1444H (corresponding to 21/09/2022G), and it was
accepted on 09/03/1444H (corresponding to 05/10/2022G). The EGA held on 17/03/1444H (corresponding to13/10/2022G) approved the
capital’s reduction from four hundred million (400,000,000) Saudi Riyals to one hundred and forty million (140,000,000) Saudi Riyals, i.e., a
value of two hundred and sixty million (260,000,000) Saudi Riyals. It should be noted that any accumulation of losses in the future will require
the Company to take measures that negatively affect it and its financial results and future expectations, such as the review of the prices of its
products, the reduction of exposure to loss-making products and the development of an action plan to increase profitable product portfolios, or
taking measures to reduce expenses such as reducing the number of employees and reallocating investments from lower income rates to higher
profit margin investments, knowing that the accumulated losses may lead to the Company’s dissolution in accordance with the Provisions of
Article (132) of the Companies Law.

2.1.3 Risks Related to Insufficient Provisions and Reserves

The Company maintains allocations to meet and cover financial obligations, in accordance with Article (69) of the Implementing Regulations
of the Cooperative Insurance Companies Control Law. These allocations include the following:

- Unearned premium allowances.

- Unpaid Claim Reserves.
- Claim Expense Reserve.
- Incurred but not reported Claims Reserves.
- Unexpired Risk Reserves.
- Catastrophe Risk Reserves.
- General Expense Reserves.
- Reserves related to protection and savings insurance, such as disability, old age, health, death, medical, expenses, etc.
The size of reserves is estimated based on expected trends in the volume and frequency of claims according to the data available at the time.
Establishing an appropriate level of claims’ reserves is an inherently uncertain process due to the difficulty and complexity of making necessary
assumptions. The table below outlines the amounts of these allocations as of December 31, 2020G, 2021G, and 2022G, in addition to the nine-
month period ended September 30, 2023G:

Table No. (6): Financial Allocations

Financial Year Financial Year Financial Year Financial Period

Allocations
Ended 31/12/2020G Ended 31/12/2021G Ended 31/12/2022G Ended 30/09/2023G

Unearned premium allowances 152,479,769 219,013,520 219,348,050 222,575,922

Unpaid Claim Reserves 79,651,443 38,482,684 40,471,478 62,360,621

Claim Expense Reserve 6,128,675 5,133,997 4,290,894 2,485,989

Incurred but not reported Claims Reserves 64,118,683 50,422,635 47,161,529 35,112,560

Unexpired Risk Reserves 14,025,166 16,210,289 25,972,063 18,722,427

Source: The Company

Since the size of reserves depends on future estimations, it is possible that the Company’s reserves may be insufficient in any period. If actual
claims exceed the claims’ reserve, the Company will have to increase its reserves, such will have a negative and material impact on its business,
financial condition and results of operations.

8
2.1.4 Risks related to Sanctions, Penalties and Business Suspension by Competent
Authorities
Considering that the Company’s business is subject to several laws and instructions issued by the Saudi Central Bank, CMA, the Council of
Health Insurance and other government entities, it will be subject to inspection visits, which may expose it to sanctions and penalties if it fails
to comply with any of these laws, regulations, and instructions, or delays in complying with any of them. The Company may also be exposed to
a number of penalties and sanctions by the Saudi Central Bank, CMA and other entities, including suspending all or some of its activities and
its share trading which would have a material adverse impact on its business, financial status and future expectations.

It should be noted that the Company has been subject to a number of fines during the past three years until the preparation date of this
Prospectus according to the below table:

Table No. (7): Sanctions and Penalties

Competent Type of Fine Amount (where

Violation/Offense Violation Date Violation Status
Authority Penalty applicable)

The Year 2020G

Non-compliance with the Cooperative Insurance

Companies Control Law:
- Intervention of a Board member in the
Company’s operational activities.
Payment
- Lack of independence of the Audit Department. 05/01/1442H was made on
Saudi Central Bank - Deficiencies in the Internal Customer (corresponding to Fine SAR (140,000) 12/01/1442H
Protection Policy. 24/08/2020G) (corresponding to
- Lack of independence of the Audit Department. 31/08/2020G).

- Deficiencies in the Internal Consumer

Protection Policy.
- Lack of adopted remuneration policy.
Payment
13/01/1442H was made on
Capital Market
Failure to disclose the end of the CEO’s mandate. (corresponding to Fine SAR (10,000) 02/03/1442H
Authority (CMA)
01/09/2020G) (corresponding to
19/10/2020G).
Payment
Ministry of Human 21/04/1442H was made on
Failure to open a file and register points of sale in
Resources and Social (corresponding to Fine SAR (20,000) 22/04/1442H
the Jazan and Madinah labor offices.
Development 06/12/2020G) (corresponding to
07/12/2020G).
Payment
Ministry of Human 25/04/1442H was made on
Resources and Social Failure to submit Al-Ahsa point of sale panel. (corresponding to Fine SAR (500) 29/04/1442H
Development 10/12/2020G) (corresponding to
14/12/2020G).
Payment
30/04/1442H was made on
Failure to ensure sufficient social distancing in the
Saudi Central Bank (corresponding to Fine SAR (5,000) 01/05/1442H
workplace.
15/12/2020G) (corresponding to
16/12/2020G).

The Year 2021G

Violations observed during the visit of the assigned

General Secretariat team:
- Failure to adhere to the deductible rates
according to the Council’s circular for the
minimum actual benefit network for each
treatment service as stipulated in the unified
document. 04/05/1442H Observations and
Council of Health Observations/
- Failure to adhere to the Company’s approved (corresponding to -- remarks have
Insurance Remarks
financial policy for collecting premiums from 17/01/2021G) been answered.
policyholders.
- Contracting with health care service providers
that are not accredited by the Council.
- Failure to pay medical claims to health service
providers within (45) working days from the
date of receipt of the claim.

9
 Competent Type of Fine Amount (where
Violation/Offense Violation Date Violation Status
Authority Penalty applicable)

Draw the
Company’s
Al Sagr Company’s violation of the Central Bank’s attention. Senior
Supervisory and Regulatory Instructions regarding Management
the transfer of compensation amounts due on claims 12/08/1442H Draw the must put in place
Saudi Central Bank linked to financial leased vehicle/motor insurance (corresponding to Company’s -- the necessary
policies without providing the relevant financing 25/03/2021G) attention. procedures
company with data on a number of vehicles or to avoid the
claims for those compensations. occurrence of
such a violation
in the future.
The fine was paid
Ministry of Human Failure to pay the employees’ wages within a week 06/09/1442H
on 08/09/1442H
Resources and Social at most from the date of the end of the contractual (corresponding to Fine SAR (10,000)
(corresponding to
Development relationship. 18/04/2021G)
20/04/2021G).
The fine was paid
The Company violated the Central Bank 14/09/1442H
on 11/10/1442H
Saudi Central Bank Supervisory and Regulatory Instructions regarding (corresponding to Fine SAR (40,000)
(corresponding to
the requirements for actuarial business controls. 26/04/2021G)
23/05/2021G).
The Company violated the Central Bank The fine was paid
06/10/1442H
Supervisory and Regulatory Instructions when on 11/10/1442H
Saudi Central Bank (corresponding to Fine SAR (20,000)
dealing with an insurance brokerage company after (corresponding to
18/05/2021G)
the expiry of the permit issued by the Central Bank. 23/05/2021G).
The Company’s failure to comply with the
Regulatory Requirements and Instructions issued The fine was paid
14/10/1442H
by the Central Bank related to precautionary and on 20/10/1442H
Saudi Central Bank (corresponding to Fine SAR (15,000)
preventive measures to fight the COVID-19 in (corresponding to
26/05/2021G)
terms of ensuring sufficient social distancing in the 01/06/2021G).
workplace.
The Company violated the Central Bank
Supervisory and Regulatory Instructions for not The fine was paid
18/12/1442H
submitting a request to obtain a written no-objection on 23/12/1442H
Saudi Central Bank (corresponding to Fine SAR (20,000)
from the Central Bank on the primary consolidated (corresponding to
28/07/2021G)
financial statements for the first quarter of the year 02/08/2021G).
2021G.
The fine was not
paid - a letter
was sent to the
Council of Health
The Company violated the provisions of the Insurance stating
Cooperative Health Insurance Law and its the Company’s
29/12/1442H
Council of Health Implementing Regulations in terms of Paragraph (b) position regarding
(corresponding to Fine SAR (205,000)
Insurance of Article (14) of the Cooperative Health Insurance the detected
08/08/2021G)
Law and Articles (76) and (93) of the Implementing observations. The
Regulations. Company is in the
process of filing
an appeal before
the Board of
Grievances.
The Company failed to comply with the The fine was paid
Zakat, Tax and 11/01/1443H
requirements of the tax invoice for not displaying on 23/02/1443H
Customs Authority (corresponding to Fine SAR (10,000)
the tax certificate at the Khamis Mushait point of (corresponding to
(ZATCA) 19/08/2021G)
sale. 30/09/2021G).
Draw the
Company’s
attention and it is
the responsibility
The Company violated the Central Bank of the Executive
Supervisory and Regulatory Instructions in terms of: Management
- Failure to publish the violations related to to implement
executive decisions issued according to the 12/02/1443H the necessary
Draw
Saudi Central Bank formula outlined in the table outlined in the (corresponding to -- measures to
attention
circular, in the Board of Directors’ report for 19/09/2021G) prevent put
the year 2020G. in place the
- Failure to classify violations subjects according necessary
to the topics specified in the circular. procedures
to avoid the
occurrence of
such a violation
in the future.

10
 Competent Type of Fine Amount (where
Violation/Offense Violation Date Violation Status
Authority Penalty applicable)

The Year 2022G

- Issuance of insurance policies to a related party

(Chairman of the Board of Directors) before
paying the full premium due.
- Failure to immediately notify the Central Bank The fine was paid
of a decline in the rating of the reinsurer (Al 03/11/1443H on 16/11/1443H
Saudi Central Bank Sagr National Company) below the required (corresponding to Fine SAR (160,000) (corresponding to
level. 02/06/2022G) 15/06/2022G).
- The Audit Committee did not study the
actuary’s reports during the year 2020G
and make recommendations to the Board of
Directors.
25/01/1444H
Council of Health Failure to adhere to the unified contract with all
(corresponding to Warning -- --
Insurance service providers.
23/08/2022G)
- Correcting the aforementioned violations
within 4 months.
- The Board of Directors held a meeting within
(20) working days.
- Providing the Central Bank with a copy of the 07/03/1444H
Saudi Central Bank minutes of the Board of Directors’ meeting (corresponding to Warning -- --
held within 5 days from its date. 10/03/2022G)
- Providing the Central Bank with a monthly
report from the date of the Board of Directors’
meeting in this regard, clarifying the level
of progress in correcting the aforementioned
violations.
The Company did not adhere to the statutory
28/04/1444H
deadline for publishing the financial statements
CMA (corresponding to Warning -- --
included in the instructions pertaining to the
22/11/2022G)
Company’s advertisements.
The Company failed to respond to the pre-approval
07/05/1444H
Council of Health request for more than 60 minutes on the National
(corresponding to Warning -- --
Insurance Platform for Health and Insurance Exchange
31/12/2022G)
Services (NPHIES).

The Year 2023G

Failure to notify the Authority of the names of

Committees’ Members and membership positions 09/06/1444H
CMA within five (5) working days from the date of their (corresponding to Warning -- --
appointment and any changes that occur within five 02/01/2023G)
(5) working days from the date of the changes.
- Failure to upload health insurance documents
to the developed Document Issuance System
within (48) hours of receiving the insurance
premium.
- Failure to adhere to the specified periods for
giving medical approvals with health care
service providers within (60) minutes of
receiving the approval request.
- Lack of commitment regarding doctors who
give medical approvals being specialists and 06/10/1444H
Council of Health
licensed by the Saudi Commission for Health (corresponding to Warning -- --
Insurance
Specialties (SCFHS) that regulates health care- 26/04/2023G)
related practices and accreditation at all levels.
- Failure to pay medical claims to health service
providers within (30) days from the date of the
claim’s receipt, according to the price list and
the mechanism agreed upon in the contract
signed between the two parties.
- Failure to comply with the provisions of
Article (11) of the Beneficiaries Regulations,
Paragraphs (2), (3) and (4).
The Company’s failure to comply with the 14/10/1444H
Council of Health
provisions of Article (11) of the Beneficiaries (corresponding to Warning -- --
Insurance
Regulations, Paragraphs (2), (3) and (4). 04/05/2023G)

11
 Competent Type of Fine Amount (where
Violation/Offense Violation Date Violation Status
Authority Penalty applicable)

Payment
15/01/1445H was made on
Council Of Health
Delay of Claims (corresponding to Fine SAR (295,600) 15/06/1445H
Insurance
02/08/2023G) (corresponding to
28/12/2023G).
22/01/1445H
The Company violated the Central Bank
Saudi Central Bank (corresponding to Warning -- --
Supervisory and Regulatory Instructions.
09/08/2023G)
Correction of the observations and comments 28/02/1445H
Saudi Central Bank included in the safety campaign form delivered (corresponding to Warning -- --
effectively. 13/09/2023G)
The Company’s failure to disclose immediately 20/3/1445H
CMA and without delay the conclusion of a contract with (corresponding to Warning -- --
Maharah Human Resources Company. 05/10/2023G)
The Company did not receive the insurance
premium upon the policy’s issuance. There is also 09/04/1445H
Council Of Health
a period of time exceeding (48) hours between the (corresponding to Warning -- --
Insurance
date of the policy’s issuance and its submission to 24/10/2023G)
the Health Information Exchange (HIE) System.
Source: The Company

Incurred violations and fines will affect the Company’s operating expenses and have a negative and material impact on its business and
financial status.

2.1.5 Risks Related to Failure to Obtain or Renew the Required Licenses, Permits and
Certificates
The Company is subject to a set of rules and regulations that require it to obtain necessary licenses, permits and approvals from the competent
regulatory authorities in the Kingdom in order to practice its activity in the insurance sector. The Company has obtained the necessary licenses,
certificates and approvals, which include: the Commercial Registry Certificates and Chamber of Commerce and Industry Certificates, the
Zakat Certificate, the Value Added Tax Registration Certificate, employment-related certificates (GOSI Contribution Certificate - the Wage
Protection Commitment Certificate - Saudization Certificate – Nitaqat Certificate) in addition to a license from the Saudi Central Bank and the
Council of Health Insurance.

The Company, as license holder, must adhere to the terms and conditions of each license and certificate it has obtained otherwise, it may not be
able to renew these licenses and certificates or obtain new required ones for the purposes of expanding its activities.

As of the date of this Prospectus, the Company has not obtained various required certificates, licenses and approvals as follows:

- Membership certificates from the Chambers of Commerce and Industry for: (1) Jeddah City Branch (Commercial Registration
No. 4030182618), (2) Riyadh City Branch (Commercial Registration No. 1010243765), (3) Tabuk City Branch (Commercial
Registration No. 3550027342), (4) ) Buraidah City Branch (Commercial Registration No. 1131046600), (5) Hail City Branch
(Commercial Registration No. 3350044740), (6) Najran City Branch (Commercial Registration No. 5950022375), (7) Jazan
City Branch (Commercial Registration No. 5900027845), (8) Al-Madina Al-Munawwarah Branch (Commercial Registration
No. 4650060439) and (9) Al-Baha City Branch (Commercial Registration No. 5800014660) which constitutes a violation of
Article (5) of the Law of Commercial Register, since any company registered in the Commercial Register must submit to the
Commercial Register Office, within thirty days from the date of registration, a certificate of membership in the Chamber of
Commerce and Industry. This violation may result in the penalty stipulated in Article (15) thereof, which may reach a fine of
SAR (50,000) For every dissenting branch.
- Salamah certificates (Civil Defense) for the head office and the following branches: (1) Jeddah City Branch (Commercial
Registration No. 4030182618), (2) Najran City Branch (Commercial Registration No.5950022375), (3) Jizan City Branch
(Commercial Registration No. 5900027845), (4) Al-Madina Al-Munawwarah Branch (Commercial Registration No.
4650060439) and (5) Al-Baha City Branch (Commercial Registration No. 5800014660): which constitutes a violation of the
Civil Defense Law and may lead to the imposition of a set of penalties, which may include: imprisonment for a period not
exceeding six months, or a fine not exceeding SAR (30,000) or both. The Company’s failure to obtain Civil Defense licenses
may result in its inability to get new municipal licenses or renew current ones which may lead to the closure of all head offices
until the regulatory procedures are completed.
- Municipality licenses for the Company’s branch in Jeddah (Commercial Registration No. 4030182618) which is considered a
violation that may be expose the Company to the penalties stipulated in Implementing Regulation of Penalties for Municipal
Violation (Published in 1444H–2023G) and a fine that might reach SAR (50,000) which might be doubled upon repetition,
in addition to the closure of two branches until the license’s issuance.

12
 - Wage Protection System Certificate (WPS) for the Company’s branches in Jazan City Branch (Commercial Registration
No. 5900027845). The Company also did not obtain the Contributor Certificate from the General Organization for Social
Insurance (GOSI) for Jazan City Branch (Commercial Registration No. 5900027845) which may lead to the imposition of
fines and the suspension of its services with the relevant government agencies.
Failure to obtain or renew required certificates and licenses to practice business activity may result in business interruption
or faltering, or the imposition of financial fines by government agencies. Thus, the Company’s business, financial condition,
results of its operations, and future expectations will be negatively and substantially affected.

2.1.6 Risks Related to Inability to Implement Strategy

The Company’s ability to increase its revenues and improve its profitability depends on the extent to which it effectively implements its
business plans and successfully achieves its strategy, including, but not limited to, improving the current activities or starting new activities.
The Company’s ability to expand its business in the future depends on its ability to continue implementing and improving operational, financial
and administrative information systems in an efficient and timely manner, as well as on its capacity to increase, train, motivate and maintain its
workforce. Furthermore, any business expansion plans that the Company intends to undertake in the future will be subject to estimated costs,
specified implementation schedule, and additional financing. If the Company fails to implement the expansion plans according to its specified
schedule and in accordance with the estimated costs, or if the desired profitability is not achieved due to various reasons, including a change
in the market situation at the time of implementing its projects or a defect in the feasibility study, this will negatively affect its competitive
position, its business results, and profitability. The Company’s ability to implement its current strategy is subject to various factors, some of
which are beyond its control, and there are no guarantees that any defect, failure, or sudden interruption in the work of production lines will
not occur during the expansion process, or that appointed employees or adopted systems, procedures, and controls will be sufficient to support
future growth, expansion, and successful achievement of its strategy. If the Company fails to implement any part of its strategy for any reason,
this will have a negative and material impact on its business, results of operations, financial position and future prospects.

2.1.7 Credit Risks

Credit risks arise when a party fails to fulfill a certain financial obligation of the other party. The Company may face credit risks in several
temporary or permanent cases, including reinsurers’ inability to fulfill their obligations with respect to settlements, the existence of receivables
from customers, the failure of other creditors to fulfill their obligations to the company, and others.

It should be noted that the provision for doubtful debts reached SAR (36,275,368) as of December 31, 2020G, SAR (39,484,811) as of
December 31, 2021G, and SAR (38,456,770) as of December 31, 2022G, compared to SAR (37,247,509) as of September 30, 2023G. The
Company may face credit risks in several temporary or permanent cases, including reinsurers’ inability to fulfill their obligations with respect to
settlements and the existence of receivables from customers. If the Company does not take sufficient allocations, customers’ non-payment may
result in risks that substantially affect its profits and business (for additional information kindly refer to paragraphs (5.5) and (5.9) “Statement
of Financial Position” of Section (5) “Financial Information and Management Discussion and Analysis”).

Pursuant to Article (5) of the Unified Compulsory Motor Insurance Policy issued by the Saudi Central Bank, insurance companies are required
to indemnify third party/parties (other than the insured) for the consequences of accidents covered under the insurance policy against third
parties. Insurance companies have the right to seek recovery from the insured, the driver or the person causing the accident to recover the
amount it had paid to the third party. Therefore, recovery from the insured, the driver or the person causing the accident to recover the paid
amounts results in risks of procrastination and failure by some people to repay the amounts due from them, which will adversely affect the
Company’s business, results of operations and financial position.

2.1.8 Risks Related to Credit Rating

As of the date of this Prospectus, the Company has no credit rating. If the Company applies for a credit rating, then there is no guarantee that
it will obtain a good rating if its risks are higher than the limit in the insurance market, knowing that any credit ratings it may obtain will affect
in the future the terms on which parties wish to agree upon when dealing with the Company. It is worth noting that the good classification of
the most famous international rating agencies such as (A.M. Best) ranges between (A++), (B+) and (S&P) ranges from (AAA) to (BBB-), as
the Company’s obtainment of a good credit rating contributes to improving the terms of its reinsurance agreements, gaining greater customer
confidence and encouraging prospective insurance applicants to choose it over its competitors. If the Company obtains the rating, it may face
a difference in its credit rating from time to time as a result of many factors that affect the credit rating and that may be beyond its control. If
the Company faces a decrease in the rating level, it will affect its ability to conduct its business and the its profit margins, which will have a
negative and material impact on its financial condition, operations’ results and future prospects.

2.1.9 Risks Related to Potential Liabilities

Some potential liabilities may arise for the Company resulting from any other obligations or costs related to its activity. The Company has
potential commitments and obligations, which are capital commitments associated with the purchase of investments related to a mutual
fund and costs of implementing new programs. The value of these potential commitments and obligations amounted to SAR (3,322,975),
SAR (8,794,105), and SAR (9,835,721), as of December 31, 2020G, 2021G, and 2022G, respectively, compared to SAR (11,927,142) as of
September 30, 2023G.

Moreover, the Company operates in the insurance sector and is subject to legal procedures in the normal course of its business. It is also
not possible to predict or determine the final results of all legal procedures that may result in potential liabilities for the Company. If these
obligations are fulfilled, this will have a negative and material impact on the Company’s business, financial position and results of operations.

13
2.1.10 Risks Related to Claims Management Process
Pricing of the Company’s insurance products, as well as reserves for claims, is dependent on the period and efficiency of notification of claims,
processing of claims, and compensation of policyholders. Efficient and effective claims management depend, among other things, on having
well-trained personnel who make accurate and timely compensation decisions regarding claims processing. Inefficiencies in the administration
and payment of claims can lead to incorrect compensation decisions, wrong decisions about the creation of the claim’s reserves and/or payment,
increased fraud, incorrect management information about the reserve and pricing. This leads to additional claims and related costs and expenses
for processing claims, as well as increase of risks involved in unsuitable technical claims and/or pricing models. These risks increase when the
period between the claim and its payment increases.

If the Company’s administrative handling of claims proves to be inefficient or ineffective, or to be exposed to costs or expenses that exceed
expected rates, the Company may have to change pricing models and/or increase prices, which may result in loss of the Company’s business
and increase in technical claims reserves. These additional costs or the effects of inflation may harm the Company’s profitability, which will
have a negative and material impact on the Company’s business, results of operations, financial position and future prospects.

2.1.11 Risks Related to Contracts with Third Parties

The Company has concluded contracts and agreements with third parties working in the insurance field, such as insurance brokerage contracts
and reinsurance contracts, in addition to other service contracts such as information technology contracts and consulting contracts (for more
information, kindly refer to Paragraph (9.7) “Summary of Material Agreements” from Section (9) “Legal Information” of this Prospectus),
and the Company relies on the possibility and ability of those parties to fulfill their obligations under the terms and conditions of those contracts
and agreements. Any agreement with third parties is subject to the Outsourcing Regulations for Insurance and Reinsurance Companies and
Insurance Service Providers, under which they are required to obtain the approval of the Saudi Central Bank before making any material
outsourcing.

The Company depends on the ability of these parties to provide reliable and continuous services, especially with regard to IT services, settlement
of medical claims and actuarial consulting services. Also, the Company’s ability to grow and meet the needs of its client relies on effective
and experienced external sources for performance of specialized functions and services. However, there is no certainty that these parties will
meet the Company’s expectations in providing services. The Company has no direct operational or financial control over its primary service
providers or outsourcing partners, and it cannot predict with certainty the unexpected termination of any outsourcing contracts.

If the Company or contracted parties are unable to adhere to the provisions of such contracts, or if future disputes or lawsuits arise and such
disputes are lost, this could have a negative and substantial impact on the Company’s business, results of operations, financial status, and future
prospects.

2.1.12 Risks Related to Reinsurance

Within the context of its strategy for risk mitigation and capital management, the Company needs to reinsure its insurance portfolio to limit
certain risks it may be exposed to with respect to motor insurance and other insurance products. Pursuant to these reinsurance arrangements,
the Company transfers the risks included in insurance to the reinsurer or such risks are born by the insurer which require insurance premiums
for providing reinsurance.

Based on its activities, the Company must reinsure its insurance portfolio in accordance with the provisions of Article (40) of the Implementing
Regulations of the Cooperative Insurance Companies Control Law,) as follows:

1. Retain at least thirty percent (30%) of its total insurance premium. The Company currently adheres to this condition.
2. Reinsure at least (30%) of its premiums in the Kingdom. The Company currently adheres to this condition.

According to the provisions of Article (21) of the Cooperative Insurance Companies Control Law, the Saudi Central Bank may impose a fine
that may reach SAR (2,000,000) on companies that do not adhere to the above-mentioned ratios. Therefore, if the Company does not adhere to
these ratios, it may be subject to that fine, which will negatively affect its business, operations ‘results, financial status and future expectations.

The Company’s ability to contract with reinsurance companies with suitable expenses is subject to several factors that are usually outside
the Company’s control, such as market circumstances that are outside the Company’s control which determine the availability of suitable
reinsurance and its costs, as well as the receipt of due amounts from reinsurers in the future, and the financial strength of reinsurers. Like
the insurance sector, the reinsurance sector is a periodic sector and subject to significant losses in the market, which could adversely affect
reinsurance prices, which could lead to changes in prices or the desire for reinsurance of some future risks. The additional statutory reinsurance
changes may lead to incompatibility between the statutory requirements for insurance companies and coverage available with the reinsurers. If
any of these incidents or any substantial changes in reinsurance prices occur, the Company may have to bear additional reinsurance expenses
or to obtain re-insurance under unsuitable terms, or may not be able to obtain appropriate re-insurance coverage, and therefore will become
exposed to increase of retained risks and the possibility of increasing losses. Knowing that transactions with reinsurers outside the Kingdom
involve additional risks related to political and economic conditions, and regulatory changes in the insurance sector in the regions to which
they belong, and if these factors affect the ability of these companies to pay their shares of future claims, this will have a negative and material
impact on the company’s business, operations’ results, financial position and future prospects.

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2.1.13 Risks Related to Reinsurance Concentration
The Company deals with a number of reinsurers to secure its insurance portfolio, which may expose it to the risk of the other party’s default.
The value of reinsured premiums with the ten main reinsurers amounted to SAR (39,232,719), accounting for (60%) of the total reinsured
premiums as of December 31, 2020G, compared to SAR (31,703,997), representing (48.54%) of the total reinsured premiums as of December
31, 2021G. While the value of reinsured premiums with the ten main reinsurers amounted to SAR (36,739,941), accounting for (58.41%) of the
total reinsured premiums as of December 31, 2022G, compared to SAR (18,369,130), representing a percentage (76.04%) of the total reinsured
premiums as of September 30, 2023G.

In the event of a reinsurer’s insolvency, bankruptcy or any other distress, hence, the Company’s business, financial status, operations ‘results,
and future prospects will be adversely affected.

2.1.14 Risks Related to Reliance on Brokers and Agents

The Company relies on brokers and agents as major distributors for marketing its products, as the value of the insurance policies concluded
by the Company through brokers and agents amounted to SAR (171,859,151), which represents (45.3%) of the Gross Premiums Written as
of December 31, 2020G, and SAR (253,397,009), which represents (57.8%) of the Gross Premiums Written as of December 31, 2021G, and
SAR (200,895,655), which represents (42.3%) of the Gross Premiums Written as of December 31, 2022G, compared to SAR (146,312,507),
accounting for (40.1%) of the Gross Premiums Written as of September 30, 2023G.

Due to reliance on brokers and agents, any interruption or termination of such arrangements with Intermediaries would have a significant
negative impact on the sales of the Company’s products, leading to substantial negative impact on the Company’s business, financial status,
and operations’ results.

It may also not be able to renew its contracts with current insurance brokers and agents if the Central Bank prevents one or a number of brokers
from providing brokerage services or for any other reason, which will prompt it to appoint other new brokers or it may not be able to renew
its current contracts under the same terms and conditions which could negatively affect its operations and business and thus be reflected in its
financial results.

2.1.15 Risks Related to Investment

The Company’s operational results partially depend on the performance of its investment portfolio. Investment results are subject to many
investment risks, including risks associated with general economic conditions, market fluctuations, volatility of interest rates, liquidity and
credit risks. The value of investments amounted to SAR (587,302,524) as of December 31, 2020G, and SAR (408,572,452) as of December
31, 2021G, compared to SAR (363,071,767) as of December 31, 2022G, while it reached SAR (449,365,172) as of September 30, 2023G.

If the Company fails to balance its investment portfolio and solvency with its liabilities, it may be forced to liquidate its investments at
unfavorable times or prices. Management of such investments requires an effective management system and a heightened ability to select
diverse investments of good quality. If the Company’s returns resulting from investments decrease, the Company will incur financial losses that
may substantially and negatively affect the Company’s business, operations ‘results, financial status, and future prospects.

2.1.16 Risks Related to Concentration of Company’s Revenues

The Company’s insurance activities are mainly focused on medical and vehicle/motor insurance sectors during the years 2020G, 2021G, 2022G
and the financial period ended September 30, 2023G, and the revenues of these two sectors amounted to SAR (333,506,040), accounting
for (88%) of total revenues as of December 31, 2020G, compared to revenues amounting to SAR (385,737,421) representing (88%) of total
revenues as of December 31, 2021G, and SAR (423,333,025) representing (89%) of total revenues as of December 31, 2022G. As for the
financial period ended September 30, 2023G, revenues reached SAR (305,181,206) representing (83%) of the Company’s total revenues.

In terms of regional revenues’ distribution, the Company’s revenues are mainly concentrated in the Eastern Region and amounted to SAR
(246,555,947), representing (65%) of the total revenues for 2020G, SAR (353,171,149), representing (80.5%) of total revenues for 2021G, and
SAR (337,988,872), representing (71.1%) of total revenues for 2022G, compared to SAR (226,342,902), representing (61.9%) of total revenues
as of September 30, 2023G.

In the event of any factors occurring that would affect the Company’s revenues from the medical insurance and vehicle/motor insurance
sectors, or its revenues from the Eastern Region, such as the entry of competitors or customers resorting to other insurance companies that offer
products and services at lower prices, the Company’s market share and thus its revenues will be adversely affected, and it may incur expenses
for marketing its products and attracting new customers, which will have a negative impact on its financial status, operations’ results and future
prospects.

2.1.17 Risks Related to Non-compliance with Quality Standards and Specifications Required
by Customers
The Company seeks to maintain the satisfaction of its customers by continuing to provide the same level of quality of its products. However,
the Company’s inability to continue providing its products with the same level of quality will adversely affect its reputation, and thus make
customers reluctant to deal with it. This will negatively affect the Company’s sales and accordingly the results of operational and financial
operations.

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2.1.18 Risks of Risk Management Policies
The Company follows certain policies to manage, measure, and control risks in line with the Implementing Regulations of the Cooperative
Insurance Companies Law and the Risk Management in Insurance Companies Regulations issued by the Saudi Central Bank, which are
periodically assessed and updated. Failure to properly implement and update the policies, or the inability of the management to identify
risks and evaluate them in a timely manner will expose the Company to various risks, including but not limited to, non-compliance with the
Cooperative Insurance Companies Control Law and its regulations, which may expose the Company to various measures as provided in Law,
including the withdrawal of the Company’s license, which will substantially and negatively affect the Company’s business, financial position,
and future prospects.

2.1.19 Risks Related to Miscalculation of Risks

The Company conducts a detailed risk assessment before issuing insurance documents for the submitted applications. This assessment is
carried out by experts who use specific programs to estimate potential losses and risks, with the help of an independent actuary, who studies
risk development patterns and future prospects based on historical performance. Inaccurate estimation of potential risks may lead to financial
losses for the Company that affects its future performance and the assessment of potential risks, and actuarial studies help mitigate the risks of
misestimating risks.

2.1.20 Risks Related to Cancellation or Non-renewal of Insurance Policies

The Company operates in a competitive insurance market. As the duration of insurance policies issued by the Company are generally short
in their terms, the Company may not be able to continue renewing insurance policies issued or to be issued in the future as expected. In case
of non-renewal or cancellation of policies by policyholders, the level of written premiums of the Company in the coming years would be
negatively and substantially affected, which would affect the Company’s business results.

2.1.21 Risks Related to Translation of Insurance Policies

Some of the Company’s insurance policies are written in Arabic and translated from English. However, the translation of some provisions in the
insurance policies provided by the Company may be inaccurate in terms of clarifying some terms included in the policy, leading to a different
interpretation of meanings between the parties. This is especially significate since the courts in the KSA rely on the Arabic text in the event of
any dispute arising between the Company and any of its clients, which expose the Company to entering into disputes with customers, which
will have a substantial and negative impact on the Company’s business, operations’ results, financial status and future prospects.

2.1.22 Risks Related to Increasing the Company’s Liabilities

The increase in the Company’s liabilities may pose a risk to the general financial position of the Company and its financial solvency. Total
Liabilities percentage reached (64%), (72%), and (80%) of total assets as of December 31, 2020G, 2021G, and 2022G3 respectively, compared
to (73%) and (67%) as of December 31, 2022G and September 30, 2023G4. The Company’s liquidity ratio also reached (1.3) times, (1.2) times,
and (1.3) times as of December 31, 2020G, 2021G, and 2022G, respectively, compared to (1.4) as of December 31, 2022G and September 30,
2023G. The cash rate reached (43%), (38%), and (33%) as of December 31, 2020G, 2021G, and 2022G, respectively, compared to (39%) and
(30%) as of December 31, 2022G, and September 30, 2023G.

Accordingly, the increase of the Company’s liabilities will adversely affect its financial status, and will thus make it difficult for the Company
to fulfill its obligations, and will have a negative impact on the Company’s business, financial status, operations’ results and future prospects.

3 In accordance with IFRS 4.

4 In accordance with IFRS 17.

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2.1.23 Risks Related to Transactions with Related Parties
The Company has transactions with related parties as outlined in the below table:

Table No. (8): Transactions with Related Parties

Transactions with related parties for the fiscal year ending on December 31, 2020G

Balance as of December 31,

Percentage of Percentage of
Nature of Nature of Value of 2020G (SAR)
Related Party Total Value of Total Value of
Relationship Transactions Transactions
Debtor Creditor Contracts (%) Revenues (%)

Total Written
13,707,906 11,480,291 -- -- 3.62%
Premiums
Mr. Fahd El
Shareholder Claims Incurred 2,220,870 -- 1,550,137 0.51% --
Turky

Leasing Expenses 1,174,472 -- -- 42.86% --

Total Written
133,617 133,617 -- -- 0.04%
Mr. Tarek Al Premiums
Board Member
Bassam
Claims Incurred (40,992) 40,992 -- -0.01% --

Total Written
Mr. Bassam 664,267 -- -- -- 0.18%
Premiums
bin Ahmed Al Board Member
Binali Claims Incurred 119,705 -- -- 0.03% --

Total Written
Mr. Abdul 11,778 -- -- -- 0.003%
Premiums
Mohsen Al Board Member
Sanaid Claims Incurred 15,571 -- -- 0.004% --

Ceded Reinsurance
461,381 -- 1,740,136 1.16% --
Premiums
Reinsurers Share of
Al Sagr 194,301 -- -- 1.141% --
Claims Paid
National
Shareholder
Insurance Reinsurance
Company Commission 32,940 -- -- 0.52% --
Revenues

Consulting Services 552,278 -- -- 100% --

Total 19,248,094 11,654,900 3,290,273 146.22% 3.83%

Transactions with Related Parties for the Year Ended December 31, 2021G

Balance as of
Value of
Percentage of December 31, Percentage of Percentage of
Nature of Nature of Transactions
Total Value of Related Party 2021G (SAR) Total Value of Total Value of
Relationship Transactions
Revenues (%) Contracts (%) Revenues (%)
Debtor Creditor

Total Written
5,123,177 8,929,336 -- -- 1.17%
Premiums
Mr. Fahd El
Shareholder Claims Incurred 4,341,949 -- 852,270 1.28% --
Turky

Leasing Expenses 1,183,827 -- -- 38.19% --

Total Written
71,690 4,607 -- -- 0.02%
Mr. Abdallah Al Premiums
Board Member
Bassam
Claims Incurred 30,391 -- 22,333 0.01% --

Ceded Reinsurance
915,110 -- 529,196 2.00% --
Premiums
Al Sagr National
Reinsurers Share of
Insurance Shareholder 143,740 -- -- 0.86% --
Claims Paid
Company
Reinsurance
44,647 -- -- 0.96% --
Commission Revenues

Total 11,854,531 8,933,943 1,403,799 43.29% 1.19%

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 Transactions with Related Parties for the Year Ended December 31, 2022G

Balance as of
Value of
Percentage of December 31, Percentage of Percentage of
Nature of Transactions
Total Value of Related Party Nature of Relationship 2022G (SAR) Total Value of Total Value of
Transactions
Revenues (%) Contracts (%) Revenues (%)
Debtor Creditor

Total Written Premiums 997,402 -- -- -- 0.21%

Mr. Fahd El
Shareholder Claims Incurred 99,520 -- -- 0.03% --
Turky
Leasing Expenses 334,534 -- -- 10.41% --

Total Written Premiums 128,288 -- -- -- 0.03%

Mr. Abdallah Al
Board Member
Bassam
Claims Incurred 11,624 -- -- 0.00% --

Ceded Reinsurance
4,371 -- 16,803 0.01% --
Premiums
Al Sagr National
Reinsurers Share of
Insurance Shareholder 243,036 -- -- 1.05% --
Claims Paid
Company
Reinsurance
15,964 -- -- 0.24% --
Commission Revenues

Total 1,834,739 -- 16,803 11.76% 0.24%

Transactions with Related Parties for the Year Ended December 31, 2023G

Balance as of
Value of
Percentage of December 31, Percentage of Percentage of
Nature of Nature of Transactions
Total Value of Related Party 2023G (SAR) Total Value of Total Value of
Relationship Transactions
Revenues (%) Contracts (%) Revenues (%)
Debtor Creditor

Mr. Yasser El Total Written

Board Member 5,472 -- -- -- 0.001%
Harbi Premiums
Al Sagr National
Reinsurers Share of
Insurance Shareholder 19,698 -- 11,900 0.27% --
Claims Paid
Company

Total 19,770 -- 11,900 0.27% 0.001%

Source: The Company

It should be noted that the Company has committed to implementing Articles (71) and (27) of the Companies Law, and transactions with
related parties have been presented to the General Assembly for a vote, but not all of the suggested transactions have been approved (for more
information about transactions with parties Related, kindly refer to Subparagraph (9.7.1) “Related Parties Contracts and Transactions” of
Paragraph (9.7) “Summary of Material Agreements” of Section (9) “Legal Information”).

There is no guarantee that contracts with related parties will be renewed in the future upon expiration of their term, as it is possible that the
Company’s BOD or the GA do not agree on such renewal, or that even related parties do not approve renewing them in accordance with the
terms of the insurance policies specified by the Company. To this end, the non-renewal of these contracts may have a negative impact on the
Company’s profitability and thus on its business, expectations, financial condition and operations’ results.

2.1.24 Risks related to Operating Systems and Information Technology

IT systems in the Company support all its work and are necessary to provide the Company’s services to its customers. The insurance sector
depends significantly on electronic systems, which increases insurance companies’ - including the Company - exposure to risks of piracy and
electronic attacks as well as deliberate penetration to data, networks and software. In addition, increasing the use of cloud services for data
storage may lead to increase the vulnerability of the Company to the risk of IT failure. For example, an electronic attack on the insurance
network may lead to the Company’s inability to provide services to its customers, which may damage its reputation and cause loss in revenues
or expose it to financial penalties. Therefore, any failure to protect or use the data properly may result in the loss of customer data or in an
unauthorized access to it.

The Company’s IT systems are also subject to external and internal risks, such as harmful programs, code defects and attempts of penetrating the
Company’s networks and lack of required updates and modifications, data leaks and human errors. All that pose a direct risk to the Company’s
services and data. Other threats include equipment malfunction, physical attacks, stealing customer information, fire, explosion, floods, severe
weather conditions, power outages and other problems that may occur during network upgrades or making other major changes as well as
the failure of the suppliers in fulfilling their obligations. If a partial or total collapse occurs in any of the IT or communications systems, the
Company’s business activities may stop or get severely affected, and any system failure, accident or penetration can cause an interruption of

18
the Company’s operations or affect its capacity to provide services to the customers, and thus will negatively affect its revenues and operations.
These disturbances may also affect the Company’s image and reputation and reduce its customer’s trust, which may result in loss of some of its
customers. In addition, the Company may have to bear additional costs to repair any damage caused by these disturbances, and in all cases, this
will have a negative and substantial impact on the Company’s business, operations’ results, financial position, and future prospects.

2.1.25 Risks Related to Lease Contracts

The Company concluded (13) lease contracts as a lessee including two draft contracts all electronically registered through Ejar network (for
additional information, please refer to Sub-paragraph (9.7.2) “Lease Contracts” from Paragraph (9.7) “Summary of Material Agreements”
from Section (9) “Legal Information” of this Prospectus). The inability of the Company to maintain the continuity of the lease contracts
related to these sites and to renew them in the same current terms or preferential terms, or its inability to use the leased premises for its intended
purpose for any reason, will force it to vacate the leased premises and find other more suitable places to carry out its activity, with no guarantee
of similar favorable lease terms. In the event of the occurrence of any of the aforementioned risks associated with lease contracts for the leased
premises, it may affect the Company’s expected business results, and its operational and financial statements.

The Council of Ministers’ Resolution No. (292) issued on16/05/1438H (corresponding to 13/02/2017G) states that unregistered Lease Contracts
through Ejar network are deemed invalid and don’t produce administrative and judicial effects. Ejar network has been launched in cooperation
between the Ministries of Justice and Housing on 17/05/1439H, and a circular was issued by the Ministry of Justice approving its application
on all contracts concluded after 04/05/1440H (corresponding to 10/01/2019G). As of the date of this Prospectus, the Company has (2) two
electronically unregistered Lease Contracts on Ejar network; therefore, in the event that any dispute arises between the Company and any of
the lessors regarding such Contracts, it may not be considered by the Saudi courts. Thus, the Company, as a plaintiff, will not be able to protect
its rights in the event that any of the lessors breach their contractual obligations, and this will negatively and materially affect the Company’s
business and future prospects.

2.1.26 Risks Related to Litigation (Lawsuits, Claims, Arbitration and Administrative

Proceedings)
As of the date of this Prospectus, the Company is a party to a number of cases related to claims resulting mainly from insurance policies, in
its capacity as a defendant, namely (132) claims related to vehicle/motor insurance policies, (3) claims related to medical insurance policies,
in addition to a dispute with the Insurance Council. The total value of these outstanding lawsuits is SAR (9,848,182), in addition to (3) labor
lawsuits of unspecified value. On the other hand, the Company is a party to one lawsuit in its capacity as plaintiff, with a value of SAR
(1,829,908) (for more information, please refer to paragraph (9.10) “Disputes and Litigations” from Section (9) “Legal Information” of this
Prospectus). In the course of its business, the Company may be subject to suits and claims related to its insurance operations, and disputes
and claims related to insurance coverage. The Company cannot guarantee that no disputes will arise with its policyholders, which may lead to
submit lawsuits before the competent judicial authorities filed by or against the Company. Subsequently, the Company may be subject to legal
claims made by government authorities and departments and investigations within the framework of new restrictions on the insurance sector
in the Kingdom. In all cases, the Company cannot anticipate the results of current or future claims in the event that they are made and does not
guarantee that such claims would not have a material effect on its business, financial condition and operations’ results. The Company cannot
accurately anticipate the cost of lawsuits or legal proceedings that may be filed by or against it or the final results of such lawsuits or judgments
issued therein, including the compensation and penalties they imply. Therefore, any negative results of such lawsuits would negatively affect
the Company.

2.1.27 Risks Related to the Protection of Trademarks

The Company’s ability to advertise its insurance products and improve its business depend on the use of its tradename and logo. The Company
has registered its logo as trademark at the Saudi Authority of Intellectual Property, however it hasn’t registered its domain at the Saudi Network
Information Center (for additional information, please refer to paragraph (9.8) “Trademark and Intellectual Property Rights” of Section (9)
“Legal Information”). The Company’s failure to register its logo as a trademark will result in its inability to prevent violation of its rights in
this regard, which will negatively affect its logo, incur expensive costs, and thus affect its operational results. The Company’s work will be
further affected if it has to compete with similar trademarks in the main markets where it operates and doesn’t have registered property rights.

Moreover, if the trademark is not registered, the Company’s related interests will be exposed to risks, which will have a substantial negative
impact on its business, financial position and operations’ results. Hence, to defend its trademark, the Company may have to enter into costly
legal proceedings which may cause substantial damage to the trademark’s reputation and have a negative impact on the Company’s ability
to attract new customers. Subsequently, the Company’s revenues will decrease, which will negatively and fundamentally affect its business,
financial position, operations’ results, and future prospects.

2.1.28 Risks Related to the Current Situation of Zakat and Income Tax
The Company has committed to submitting its Zakat returns for the fiscal year ending on December 31, 2022G, and has obtained the final
Zakat Certificate from ZATCA under No. (1110232995) dated 18/03/1445H (corresponding to 03/10/2023G), valid until 21/10/1445H
(corresponding to 30/04/2024G). The Company may be exposed to liabilities resulting from differences in calculating Zakat and income tax. As
of the year ended December 31, 2020G, the Company received final zakat assessments for the years 2012G to 2018G, and the total additional
Zakat obligations amounted to SAR (36,300,000). Then, the Company appealed against this assessment before the General Secretariat of
Tax Committee, and in parallel submitted a settlement request to the Settlement Committee of ZATCA. During 2021G, ZATCA Settlement
Committee offered to reduce Zakat to SAR (36,200,000), a settlement that was rejected by the Company. Accordingly, the Company pursued
the appeal submitted to the General Secretariat of Tax Committee, which issued its decision and an additional Zakat obligation amounting

19
to SAR (36.200.000). The Company has filed an appeal before the Committee Appeal Committee for Tax violation and Disputes against this
assessment, which was rejected. As of the date of this Prospectus, the Company is working to settle this liability and has paid installments
amounting to SAR (10,028,945), while the value of the remaining unpaid installments amounts to SAR (26,231,332).

During the year 2021G, the Company has also received an initial assessment for the years 2019G and 2020G with an additional liability of
SAR (9,600,000), against which it lodged an objection to the General Secretariat of Zakat, Tax and Customs Committees. The Company has
created an allocation for Zakat amounting to SAR (42,652,370) as of December 31, 2022G.

The Company cannot predict the outcome of the objections raised against the mentioned assessments or whether the General Secretariat of
Zakat, Tax and Customs Committees ZATCA will accept its Zakat and tax estimations or will require the Company to pay additional amounts,
as such will substantially and negatively effect on the Company’s benefits, operations’ results, financial position and future prospects.

2.1.29 Risks Related to Insufficient Insurance Coverage

The Company has provided necessary insurance coverage by concluding a number of insurance policies to ward off some risks and preserve
its assets and property, (for more information on insurance coverage, please refer to subparagraph (9.9) “Insurance” of Section (9) “Legal
Information” of this Prospectus).

The concluded insurance contracts include deductible amounts and factors excluded from the insurance coverage, in addition to other restrictions
related to the insurance coverage to be negotiated with insurance companies. The Company’s ability to obtain the compensation due to it by
the relevant insurance company depends on its financial solvency and ability to meet the value of this compensation. Hence, insurance may not
cover all the losses incurred by the Company, and no guarantee is given to the Company that it will not incur losses that exceed the limits of
insurance policies or that are outside the scope of coverage included in such policies. It is possible that situations may arise in which the value
of the claim exceeds the value of the insurance maintained by the company, or that the compensation claim submitted by the company to the
relevant insurance company will be rejected, or that the claim and compensation period may be prolonged. The company’s inability to renew
the aforementioned insurance policies may lead to the lack of adequate insurance coverage for an accident, and thus the Company may lose the
capital invested in any of these properties that are damaged or destroyed, and it may also lose the future revenues expected from them, which
will negatively affect the Company’s business, its future prospects, operations’ results and financial condition.

2.1.30 Risks Related to Natural Disasters

All insurance companies are exposed to losses resulting from unpredictable events that may affect many risks covered by the Company, in
particular large-scale weather events with regard to vehicle insurance or epidemics in case of health insurance. Other events that can affect the
Company and insurance policies include natural and unnatural events, including, but no limited to, snow or sand and storms, floods, winds,
fires, explosions, earthquakes, industrial accidents and terrorist actions.

The size of the Company’s losses as a result of these disaster events depends on the frequency and severity of each event and reinsurance
arrangements made by the Company. Despite the Company’s efforts to reduce its exposure to these events, determine appropriate price for them,
or establish appropriate conditions for risk insurance, these efforts may not succeed. In addition, any disaster that may affect the Company’s
offices or any other sites will negatively affect the Company’s business, financial position, and future prospectus.

2.1.31 Risks Related to Reliance on Non-Saudi Employees and maintaining an acceptable

Saudization rate
The total number of the Company’s employees accounts for (248) including (195) Saudi employees and (53) non-Saudi employees, with a
Saudization rate of (79.75%). The Company is classified as Medium Category (c) ‘engaged in Business Services and currently falls under
‘Platinum”category of the Nitaqat Mutawar Program. It may be challenging for to the Company to maintain the same percentage of Saudi
employees in the future, and thus it may not meet the requirements of “Nitaqat Mutawar Program”. If the Company is unable to continue to
comply with the requirements of the Nitaqat Program, it may be classified under the Red Range. In that case, it may face several of penalties,
including:

- Disallow the change of expatriate employees’ occupations.

- Disallow the transfer of expatriate emloyees’services.
- Disallow the issuance of new visas.
- Disallow the issuance of work permits for expatriate employees.
- Disallow the renewal of work permits for current expatriate employees.
In addition, the government takes measures to regulate the employment of non-Saudi employees in the Kingdom in accordance with the Labor
and Residence Regulations of the Kingdom of Saudi Arabia. These measures include taking strict measures against non-Saudi employees who
do not work for their sponsor and whose work’s nature does not match with their job requirements (as stated in their work permit), especially
after the abolition of the foreign employee’s sponsorship system, also known as “kafala” (starting from the second quarter of 2021G), which
will allow the foreign employee upon the expiration of his employment contract to move from one entity to another without the employer’s
approval, as part of the “Improving the Contractual Relationship” initiative for employees in private sector establishments. The initiative
also limits transfer mechanisms during the validity of the contract, provided that the notice period and specified restrictions are adhered to.
The exit and return service allows the foreign employee to travel outside the Kingdom upon submitting the application and notifying the
employer electronically, while the final exit service enables the expatriate employee to leave immediately after the end of the contract by

20
electronically notifying the employer and without requiring his approval, in addition to the possibility of leaving the Kingdom and bearing all
the consequences of contract termination. It should be noted that all these services are available through the “Absher” and “Qiwa” platforms
established by the Saudi Arabian Ministry of Human Resources and Social Development since this initiative started in March 2021G.

There is no guarantee that the Company will be able to provide the necessary labor force or employ the required number of expatriate
employees in favorable terms, and may also face challenges in maintaining its Saudi national employees. If the number of this category of
employees decreases, its overall Saudization rate will decrease as well, therefore the company will not be bound by the requirements of the
developed “Nitaqatn Mutawer Program”. The occurrence of any of the aforementioned events will have a substantial negative impact on the
Company’s business, financial position, operations’ results and future expectations.

2.1.32 Risks Related to Dependence on Key Personnel and Attraction of Competencies

The Company depends on the experiences and capacities of leading personnel. Therefore, the Company’s success may depend on its ability to
ensure the continuity of such competencies and to find alternatives if they leave the Company. The Company’s success relies on maintaining its
relationships with brokers by ensuring long-term retention of staff and on its ability to attract and retain new qualified employees.

There is no assurance that the Company can retain the services of its employees or improve the level of their skills, as it depends on the
expertise and capabilities of the leading employees. Therefore, the Company’s success may depend on the extent of its ability to ensure the
continuity of these competencies, and on finding alternatives if they leave the Company. The Company’s success depends on services provided
to its customers, maintaining them, and working to develop the quality of customers’ service, which can be achieved by applying continuous
organizational and development plans for the Company’s operations in all administrative sectors under the supervision of leading employees
at the level of the Senior Management, which requires working to maintain employees and ensure their continuity, attracting new qualified
employees, and ensuring their continuity.

In order to ensure the continuity of leading employees who have expertise and qualifications, the Company has approved a succession plan for
Senior Executives to ensure that these positions remain vacant. The plan includes enrolling employees in training and development programs
that lead to acquiring the required functional skills to fill these positions and raising the level of their skills. The Company may also need to
increase salaries to ensure long-term retention of its personnel and attract new well-qualified staff which will negatively affect the company’s
financial position. All of this may make it difficult for the Company to retain some employees, and the Company’s loss of services of one or
more members of its senior management or divisions and departments may hinder the implementation of its business strategy, and this will have
a negative impact on its business, financial condition, and results of its operations.

2.1.33 Risks Related to Employee Misconduct

Despite having internal work regulations approved by the Ministry of Human Resources and Social Development No. (84572) dated
20/07/1441H (corresponding to 15/03/2020G), the Company cannot guarantee the prevention of employees’ misconduct or error such as
fraud, intentional or unintentional errors, embezzlement, theft, forgery, abuse of property and acting on its behalf without obtaining the due
administrative authorizations. Subsequently, such behaviors may result in consequences and liabilities incurred by the Company, regulatory
sanctions, or financial liability which could negatively affect the Company’s reputation, operations and financial position.

2.1.34 Risks Related to Access to future Financing

The Company’s ability to obtain sources of financing for its business depends on several factors, including factors related to its ability to obtain
the regulatory approvals in addition to its financial condition and creditworthiness. In the future, if the Company needs to inject a large amount
to finance the expansion of its activities and products or improve its solvency, it will encounter challenges in obtaining financing sources and,
if obtained, they may be at unfavorable costs and conditions. If the Company needs to increase its capital to obtain additional financing, the
ownership percentages of the current Shareholders may decrease. The difficulty of obtaining appropriate financing in the future may negatively
affect the Company, its financial performance and business plan.

2.1.35 Risks Related to False Insurance Claims and Other Fraudulent Activities
The Company is vulnerable to fraud and deception from various sources, such as suppliers, intermediaries/brokers, customers and other parties.
Sources include customers who may provide incorrect statements or fail to fully disclose covered risks before purchasing insurance coverage,
and policyholders who submit fraudulent or exaggerated claims. It should be noted that the technical methods applied to practice fraud and
deception are constantly evolving, which makes it difficult to detect these practices.

The occurrence or presence of fraud or deception in any aspect of the Company’s business will have a negative impact on its business,
operations’ results, financial position and future prospects, and will also harm its reputation and trademark.

2.1.36 Risks Related to Failure to Apply Loss Limits or Exclusions in Insurance Policies
The Company may not be able to apply, as deemed appropriate, different provisions of its insurance policies, such as limits on losses or
exclusions from coverage that have been negotiated to limit the risks of these policies. As the practices of the sector change, and the legal,
social and other conditions alter, unexpected and unintended problems related to claims and coverage may arise, which may negatively affect
the Company’s business either by expanding coverage beyond its expectations, or by increasing the size or number of claims. It is very difficult
to predict the effects of claims and coverage problems and this may harm the Company’s business.

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The insurance policies issued by the Company also include conditions requiring immediate notification of claims and the Company’s right
to refuse coverage in case of violation of that condition, in addition to restrictions that reduce the period during which the policy holder may
file a claim against the Company for breach of contract or any other claim. A court or regulatory authority may cancel or invalidate any
exception, and legislation may be issued to limit the use of insurance policy’s supplements and limits on losses in a way that negatively affects
the Company’s losses, which may have a negative and material impact on the Company’s business, financial position or results its operations.
In some cases, these changes may not become apparent until the Company issues the insurance policies that are affected by those changes.
Subsequently, the full scope of liability under the Company’s insurance contracts may not be known for many years after the contract is issued.

2.1.37 Risks Related to the Company’s Reputation

The reputation of the Company is very important to attract and retain new clients and establish strong relationship with counterparties. The
Company’s reputation can be harmed in future as a result of several factors, including but not limited to, a decrease or change of its financial
results, legal or regulatory actions against the Company, or behavior of any of its employees that may cause the Company to violate the
applicable legal requirements. The damage to the Company’s reputation will adversely affect its business, financial condition, operations’
results, profitability of share and future prospects.

2.1.38 Risks Related to Anti-money Laundering and Counter-terrorism Financing Regulations

The Company is currently complying with Anti-Money Laundering and Counter-Terrorist regulations issued by the Saudi Central Bank, the Anti
Money Laundering and Counter-Terrorist Financing Rules for insurance companies, the Anti-money Laundering Law and its Implementing
Regulations, and the Law of Combating Terrorism and its Implementing Regulations. These regulations clarify the procedures that must be
taken upon accepting any client (whether an individual or a company), and clarify the due diligence procedures that must be followed as well
as the procedures for reporting suspicious transactions and other procedures.

Failure to comply with anti-money laundering and combating terrorist financing regulations renders the Company subject to legal accountability
and thus leads to the imposition of fines and/or penalties that the Company shall bear, and consequently, will have a negative material impact
on the Company’s business, financial condition, operations ‘results, and future prospects.

2.1.39 Risks Related to the Outbreak of the COVID-19 Pandemic

The Coronavirus (COVID-19) started spreading in December 2019G, and was classified as a global pandemic by the World Health Organization
in March 2020G. The pandemic negatively impacted most business sectors across the world. As the virus spread, most world countries took
preventive actions to limit its outbreak. The Government of Saudi Arabia was proactive in taking preventive measures to curb the spread of the
virus. It took strict decisions in this regard, resulting in, but not limited to, imposing a partial or total curfew in some cities and governorates
of the Kingdom during the year 2020G, closing airports and malls and all activities within them, with the exception of grocery stores and
pharmacies, and reducing the number of working hours for some sectors and forcing some of them to work remotely. The precautionary
measures taken by the Government to limit the spread of Coronavirus (COVID-19) have significantly affected all economic sectors and
therefore the need for insurance or insurance claims for the damages resulting from these closures. Given that there is no guarantee that this
virus or its variants will not spread again, or the spread of any other disease or epidemic, the Company cannot estimate the value of losses
resulting from that if it occurs. The Company does not guarantee that there will be no consequences in the future that will negatively and
materially affect the Company’s business, financial condition, operations’ results and future expectations.

2.1.40 Expected Future Risks

The Company anticipated several of risks that may occur in the future and affect its business and operations’ results. The Company has
considered that it is exposed to the following risks:

- Accuracy of underwriting, and these risks are represented in: The data received from clients may not match the client’s loss
percentage - Hiding important facts from customers while ensuring risks - Medical insurance may face risks resulting from
a decrease in the business of small and medium companies, as this will have a direct impact on the loss percentage in end
of year.
- Claims Risk knowing that fraudulent claims may affect the loss ratio.
- Information Technology Risks, such as inadequate coverage of IT business continuity plan potential - Operations can be
affected due to unexpected disasters/crises to deal with - The Company’s website must be managed by a new vendor and a
team of experts - The Company’s system is old and needs to be updated in order to cover all regulations and needs and work
faster with advanced tools and devices - There is an urgent need for an anti-money laundering system to match all regulations
set by governments.
- Cybersecurity Risk: The Company needs to contact and appoint a new supplier to manage its Security Operations Management
System and Security Operation Center (SOC).
- Regulatory Risks related to: Compliance with inspection visits conducted by the Central Bank of Saudi Arabia and the Health
Insurance Council and observations submitted by regulatory authorities that led to the issuance of warnings and fines.
- Operations Risks: There are vacant positions that must be filled and skilled personnel must be employed, and the Company
must complete shortcomings, fill vacancies and invest in technical and security/safety solutions – The Company’s increasing
operating expenses negatively affect its profitability and solvency margin. If these expenses are saved, the Company will face
regulatory and technical risks in addition to Reputation risks.

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 - Competitiveness: Competition in the insurance sector has a negative impact on Al Sagr sales.
- Financial Risks: They are represented by the inadequacy of the Company’s current capital, the need to increase it, and other
risks related to liquidity and negative cash flow.
The Company cannot predict whether these risks will occur in the future and how they will affect the its business and financial position.

2.1.41 Risks Related to not Committing to the Minimum Number of Board Committees
Meetings
During the year 2022G, the Audit Committee held one meeting, which does not comply with the requirements of Paragraph (53) of the Audit
Committee Regulation in Insurance and/or Reinsurance Companies and the Company’s Audit Committee Work Regulations, which stipulate
that the Audit Committee meetings shall be (6) meetings annually.

Furthermore, during the years 2020G and 2021G, the Company did comply with the minimum number of Executive Committee meetings, set at
(6) meetings in accordance with Article (98) of the Insurance Companies Governance Regulations and Article (5) of the Executive Committee
Work Regulations, so the Executive Committee held (5) Meetings in 2020G and one (1) meeting in 2021G.

Additionally, the Risk Committee did not comply with to the minimum number of annual meetings which is (4) according to the Company’s
Risk Committee Work Regulations, as it met (3) times for each of the years 2020G and 2021G.

The non-compliance of Board Committees with meeting requirement according to the relevant regulations may result to their failure to perform
their duties and powers before the BOD, and thus may not be able to submit reports to the Board and prepare plans and policies entrusted
to them, which may negatively affect the Company’s business. The Company may also be exposed to penalties imposed by the competent
authority (the Capital Market Authority and the Insurance Authority) based on their assessment, which could negatively affect its business and
the results of its operations.

2.1.42 Risks related to amendments to international accounting standards or the application

of new international accounting standards (IFRS) in the future
The Company's audited financial statements were prepared for the fiscal years ending on December 31, 2020, 2021, and 2022, and the nine-
month period ending on September 30, 2023, along with the accompanying notes, in accordance with the International Financial Reporting
Standards (IFRS) adopted in the Kingdom of Saudi Arabia and other standards and issuances approved by the Saudi Organization for Auditors
and Accountants (SOCPA). The Company is obligated to apply any amendments or changes to the approved standards from time to time.
Therefore, any changes in these standards or the requirement to apply any amendments could negatively affect the financial statements and
thus the Company's financial results and financial position.

2.2 Risks Related to the Market and Industry

2.2.1 Risks Related to Withdrawal of License to Undertake Insurance Activities

The Company obtained the Saudi Central Bank’s License no. TMN/13/20083 dated 23/03/1429H (corresponding to 31/03/2008G) to carry out
insurance activity in the branches of (1) general insurance and (2) health insurance in accordance with the Cooperative Insurance Companies
Control Law and its Implementing Regulations. The License was renewed on 23/02/1443H (corresponding to 30/09/2021G) for a period of 3
years, starting on 14/11/1443H (corresponding to 13/06/2022G) for three years starting on 17/03/1444H (corresponding to 13/10/2022G) and
ending on 19/03/1447H (corresponding to 11/09/2025G).

Article 76 of the Implementing Regulations of the Insurance Companies Control Law states that the Saudi Central Bank has the right to
withdraw the license of the Company in the following case:

1. no business activities for a period of six months from the issuance date of the license.
2. None compliance with the law and these implementing regulations.
3. Providing SAMA with false information in its licensing application.
4. Conducting its business and affairs in a manner that threatens to make it insolvent or that it is hazardous to its policyholders,
stockholders, or the public.
5. Insolvency, or its assets are not sufficient for carrying on its business.
6. The business is fraudulently conducted.
7. The paid-up capital falls below the prescribed minimum limit or failure to fulfill the provisions of article 68.
8. The business or volume of activities falls to a limit that SAMA finds unviable to operate number.
9. Refusal or delay of payments due to beneficiaries without cause.
10. Refusal to be examined or to produce its accounts, records, or files for examination by SAMA.
11. Failure to pay a final judgment against it related to its insurance operation.

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If the license is withdrawn from the Company, it will not be able to continue its operations in a regular manner in KSA. which will have a
negative impact on its business and will thus adversely affect its business, operations’ results, financial position, future expectations, and its
share price in the market. Accordingly, the shareholders may lose part or all of their investment in the Company.

2.2.2 Risks Related to Approvals for New Products or Renewal of Existing Ones
Based on the Cooperative Insurance Companies Control Law and Implementing Regulations for offering new insurance products, the Company
is required to obtain the Saudi Central Bank’s approval (the powers of which were transferred to the Insurance Authority as of the date of this
Prospectus) (final or temporary) before marketing or offering any new product, noting that the approval process for the Company’s insurance
products takes place in three stages, which are: (1) submitting a request for approval of the product (2) reviewing the form (3) granting final or
temporary approval for the product or reject it.

The Company has obtained approvals from the Saudi Central Bank to practice insurance activity in the following branches: (1) general
insurance and (2) health insurance. It currently provides various types of insurance coverage to its customers, and is permitted to offer (45)
insurance products, and has obtained all final approvals in this regard. Any delay in obtaining approvals for new products or renewal of
approvals for current products will have a negative and substantial impact on the Company’s business, financial position, and future prospects.

2.2.3 Risks Related to Non-compliance with Existing Laws and Regulations and/or Issuance
of New Laws and Regulations
The Company is subject to the applicable laws and regulations of the insurance sector in the Kingdom, including the Companies Law and the
Cooperative Insurance Companies Control Law and its Implementing Regulations. It is also subject to the supervision of the Saudi Central
Bank, which is responsible for regulating the insurance sector in the Kingdom, including policies, rules, licensing, competition, investment
allocations, service standards, technical standards, and settlement arrangements.

With the aim of organizing, supervising and controlling the insurance sector in the Kingdom in a way that supports and enhances its
effectiveness, and to develop insurance awareness, protect the rights of the insured and beneficiaries, stabilize the insurance sector, contribute
to financial stability, strengthen, develop the insurance sector, and work to consolidate the principles of the insurance contractual relationship,
the Insurance Authority was established under Ministerial Resolution No. (85) dated 28/01/1445H (corresponding to 15/08/2023G), which
officially began its work on 09/05/1445H (corresponding to 23/11/2023G). It is expected that changes will occur in terms of unifying the
regulatory procedures for the insurance sector in one body that acts as a regulator for the sector, so that this sector is currently regulated by
the Central Bank and the Council of Health Insurance, in addition to the transfer of all communication channels related to regulation and
compliance to the Insurance Authority. Although laws, regulations, rules and instructions issued by the Central Bank and the Council of Health
Insurance related to regulating the insurance sector are still in effect, new instructions may be issued by the Insurance Authority to amend
applicable laws, regulations, rules and instructions.

Because the Saudi insurance market is constantly evolving, this may limit the Company’s ability to respond to market opportunities, and may
force it to bear significant annual expenses to comply with the regulatory laws and regulations. There can be no guarantee that the applicable
laws or regulatory framework will not change further or be interpreted in a manner that may materially or negatively impact the Company’s
business, financial condition, or operations’ results. Also, if the Company fails to comply with the applicable laws, regulations and instructions,
it will be subject to regulatory penalties including fines, suspension of work, and withdrawal of its license to practice insurance, which would
negatively impact the Company’s business, financial position, and future prospects.

As a listed company, the Company is subject to the laws, rules, and requirements of the CMA and the Saudi Exchange (Tadawul). The CMA
requires listed companies to comply with the Rules on the Offer of Securities and Continuing Obligations and special instructions issued
by the CMA and the Listing Rules issued by Tadawul. In particular, listed companies are required to periodically disclose significant and
financial developments and the Board of Directors report. Insurance companies shall also be committed to announcing their financial results
in accordance with templates approved by the CMA, which shall include clear data on the surplus (deficit) of insurance operations minus
the returns of policyholder’s investments, the total written insurance premiums, net insurance premiums, net claims incurred, the net profits
(losses) of policyholder’s investments, and net profits (losses) of shareholders investments, and compare this data with the corresponding
quarterly or annual period. In accordance with the Continuing Obligations of Listed Companies Manual, the annual financial results published
on Tadawul website must be derived from the audited financial statements approved by the Company’s external auditor designated by
the Assembly and approved by the Board. Announcements must be made using the announcement templates given in the Instructions of
Companies’ Announcement of their Financial Results. Furthermore, the Company must also submit a statement of all the reasons and factors
related to the change in the financial results of the current fiscal year along with the comparison period, and the reasons must include all items
of the financial results announcement.

With respect to the solvency of public joint-stock companies, on 23/01/1438H (corresponding to 24/10/2016G), the CMA issued its Resolution
no. (1-130-2016) amending the Procedures and Instructions Related to Listed Companies with Accumulated Losses amounting to 50% or
more of its Share Capital in light of the new Companies Law, and its name was changed to “Procedures and Instructions Related to Listed
Companies with Accumulated Losses amounting to (20%) or more of its Share Capital” which came into effect on 25/07/1438H (corresponding
to 22/04/2017G). Furthermore, the CMA required listed companies to follow the “Instructions for the Listed Companies Announcements”
issued pursuant to CMA Board’s Resolution no. (1-199-2006) on 18/07/1427H (corresponding to 12/08/2006G) and amended pursuant to
resolution no. (3-79-2023) on 19/02/1445H (corresponding to 04/09/2023G).

The Company’s failure to comply with these laws, rules and requirements will expose it to penalties, including fines, suspension of stock
trading, and delisting shares on the Saudi Exchange (Tadawul), which would negatively and substantially impact the Company’s business,
financial condition, operations’ results, and future prospects.

24
It is worth noting that, in compliance with the requirements of Article (58) of the Implementing Regulations of the Cooperative Insurance
Companies Control Law, the statutory deposit has been increased from (10%) to (15%) of the paid-up capital due to the risks facing the
company. This was done pursuant to Central Bank letter number (4403363) dated 16/04/1444H (corresponding to 10/11/2022G). As of the date
of this disclosure, the statutory deposit amounts to twenty-one million (21,000,000) Saudi Riyals, representing (15%) of the company’s capital
of one hundred and forty million (140,000,000) Saudi Riyals. After increasing the capital to three hundred million (300,000,000) Saudi Riyals
upon the completion of the rights issue process worth one hundred and sixty million (160,000,000) Saudi Riyals, nine million (9,000,000) Saudi
Riyals will be allocated to increase the statutory deposit to thirty million (30,000,000) Saudi Riyals, representing (10%) of the capital. If the
Insurance Authority decides in the future to increase the percentage of the statutory deposit due to risks facing the company, the company will
be obliged to allocate additional funds to increase the statutory deposit, which constitutes an additional commitment for the company to seek a
source to provide the additional amount, potentially impacting its financial position, operational results, and future expectations.

The Company is also subject to the supervision of a number of government agencies in the Kingdom, including, but not limited to, the Insurance
Authority, the Council of Health Insurance, the Capital Market Authority, the Ministry of Commerce, and others. Therefore, the Company is
subject to the risks of amendments in laws, regulations, circulars and policies in the Kingdom. The legislative and regulatory environment in
the Kingdom is witnessing the issuance of many laws and regulations, which are continuously developed and improved.

In addition to the fact that the costs of complying with these regulations are considered high, however, in the event of any amendments made
to the current laws or regulations or the issuance of new laws or regulations, this will lead to the company incurring additional unexpected
financial expenses for the purposes of complying with those regulations and meeting the requirements of these laws, or it may be subject to
penalties and fines imposed by the competent supervisory authorities in the event of non-compliance with these regulations and regulations on
an ongoing basis, which will negatively affect its business, operations’ results, financial position and future prospects.

2.2.4 Risks Related to Non-compliance with the Council of Health Insurance Regulations
After the approval of the Saudi Central Bank, the Health insurance products offered by the Company are subject to control by the Council
of Health Insurance. The requirements of the cooperative health insurance oblige the Company to comply with specific requirements for
health products, including the provision of a specialized medical team to give approvals within a period not exceeding (60) minutes. These
requirements also oblige insurance companies to pay amounts due to health service providers such as hospitals, clinics and other medical
service providers within a period not exceeding (45) days. If the Company does not comply with such requirements, it will be subject to
statutory penalties, including the withdrawal of the license to provide health services products, which will negatively affect the Company’s
operations, financial position and future expectations.

2.2.5 Risks Related to the Regulatory Environment

The Company’s work is subject to applicable Laws in the Kingdom. The regulatory environment in which the Company operates is subject
to change. Regulatory changes resulting from political, economic, technical and environmental factors may have a significant impact on the
Company’s operations by restricting the development of the Company and the increase of its customers, reducing the Company operations
and sales of its services or creating additional competition. The Company may consider necessary or appropriate to modify its operations in
accordance with these Laws and may bear additional costs in this regard, which would have a substantial negative impact on the Company’s
operations, financial position, and future prospects.

2.2.6 Risks related to the implementation of the new Companies Law and the amended
Corporate Governance Regulations
On 29/11/1443H (corresponding to 28/06/2022G), the Council of Ministers approved the Companies law issued pursuant to Royal Decree No.
(M/132) dated 01/12/1443H (corresponding to 30/06/2022G), which aims to facilitate regulatory procedures and requirements to promote the
business environment and support investment. It also aims to achieve a balance between stakeholders, provide an effective and fair corporate
governance framework characterized by fairness, devote institutional work, and contribute to the sustainability of economic entities, including
family companies, attract local and foreign investments, and provide financing sources. which meets the needs and requirements of the
entrepreneurship sector, and stimulates the growth of small and medium enterprises, this law became effective on 26/06/1444H (corresponding
to 19/01/2023G). replacing the previous Companies Law issued by Royal Decree No. (M/3) dated 28/01/1437H (corresponding to 10/11/2015G)
and the Professional Companies Law issued by Royal Decree No. (M/17) dated 26/01/1441H (corresponding to 25/ 09/2019G), provided that
all provisions that conflict with it are repealed. All existing companies upon the entry into force of the new Companies Law must amend their
positions in accordance with its provisions within a period not exceeding (two years) starting from the date of its entry into force. Exception to
this, include the determination of the provisions by the Ministry of Commerce and the Capital Market Authority - each within its jurisdiction
concerning the companies subject to those provisions during that period. On 11/06/1444H (corresponding to 04/01/2023G), the Ministry of
Commerce and the Capital Market Authority clarified the mechanism for implementing the Companies Law. According to this mechanism,
the period for amending conditions does not include (1) new companies that are established after the entry into force of the law, which will
be subject all provisions of the Law from the date of its entry into force, (2) provisions that were extended from the Companies Law issued
by Royal Decree No. (M/3) dated 28 /01/1437H (corresponding to 10/11/2015G), (3) the crimes and violations specified by the Law and the
penalties, and (4) procedural obligations imposed on the Company or its administrative body upon the entry into force of the Law. The Ministry
of Commerce and the Capital Market Authority also outlined the provisions that companies must comply with from the effective date of the
Law.

The Corporate Governance Regulations issued by the Board of the Capital Market Authority were amended pursuant to Resolution No.
(8-16-2017) dated 16/05/1438H (corresponding to 13/02/2017G) based on the Companies Law issued pursuant to the Decree. Royal No.
(M/3) dated 28/01/1437H (corresponding to 29/10/2016G) by Capital Market Authority Board Resolution No. (5-8-2023) dated 25/06/1444H

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(corresponding to 18/01/2023G) based on The Companies Law issued pursuant to Royal Decree No. (M/132) dated 01/12/1443H (corresponding
to 30/06/2022G).

Any violation of these rules and procedures or failure to implement them exposes the company to accountability by the Capital Market
Authority, which will have a negative and material impact on the company’s business, financial position, results of its operations and future
expectations.

2.2.7 Risks Related to Economic Performance and Insurance Sector

The financial performance of insurance companies depends largely on the local economic conditions within the Kingdom as well as the global
economic conditions that affect its economy. The unstable global economic conditions and the significant drop in oil prices may be a factor
affecting the Kingdom’s economy. Since the Company’s economic performance is linked to some extent with the economic situation in the
Kingdom and in the world, then its financial results will be affected by the changes that may occur that result in a decrease in the demand for
its products and services. In addition, the trends of premiums and claims in the insurance markets are volatile in nature, and unexpected events
such as natural disasters, high inflation rates and competition may affect the size of future claims, which will negatively affect the profits and
returns of insurance companies. The decrease of oil prices will significantly affect the local income, economic activity and the income of
individuals, and consequently the ability of individuals and companies to obtain insurance products such as those offered by the Company.
Hence, there will be a decrease in the Company’s sales which will negatively impact the Company’s financial position. In addition, the rise
in leases, which are hugely affected by economic changes in the Kingdom, will lead to higher costs incurred by the Company, which may
change the location of its branches, and the transition period to other branches will lead to a slowdown in its business until the completion of
the transfer process, thus negatively affecting its sales and business results.

2.2.8 Risks Related to the Economic Performance of the Kingdom

The Company’s future performance depends on a number of factors related to the economic conditions in the Kingdom in general, including,
but not limited to, inflation factors, GDP growth, average per capita income, and so on. The Kingdom’s macro and micro economy depends
mainly on oil and oil industries, which still control a large share of the GDP. Accordingly, any unfavorable fluctuations that occur in oil prices
will have a direct and substantial impact on the plans and growth of the Kingdom’s economy in general and on government spending rates,
which would adversely affect the Company’s financial performance as it operates within the Kingdom’s economic system and is affected by
government spending rates. The continued growth of the Kingdom’s economy also depends on several other factors, including the continued
growth of the population and investments of the public and private sectors in the infrastructure. Therefore, any negative change in any of these
factors will have a significant impact on the economy and thus will adversely and substantially affect the Company’s business, financial results
and future prospects.

2.2.9 Risks Related to Political and Economic Instability in the Middle East
Some countries in the Middle East suffer from economic, political or security instability at the present time, which may negatively affect the
Kingdom’s economy and consequently the ability of the Company’s customers to renew their relationship with it and its inability to obtain
new customers and thus negatively affect its revenues, profits and results of operations. There is no guarantee that the negative developments
in relations with the countries which are witnessing unstable political conditions, or economic and political conditions in those countries,
or in other countries that will not negatively affect the Kingdom’s economy or foreign direct investment therein or the capital markets in
the Kingdom in general, and these factors may negatively and materially affect the company’s business and the results of its operations. Its
financial position and future expectations.

Any unexpected major changes in the political, economic, or legal environment in the Kingdom and/or any other country in the Middle
East, including, but not limited to, normal market fluctuations, economic stagnation, insolvency, high unemployment rates, technological
transformations, and other developments, may negatively and substantially affect the Company’s business, results of operations, financial
condition, and future prospects.

2.2.10 Risks Related to Restrictions on Insurance Companies Ownership

Ownership of shares in insurance companies is subject to some restrictions imposed by the Cooperative Insurance Companies Control Law
and its Implementing Regulations. Pursuant to Article (9) of the Cooperative Insurance Companies Control Law and Article (39) of its
Implementing Regulations, SAMA written approval is required for any mergers, acquisition, transfer of ownership, and opening new branches
by any company or Reinsurance Services. In compliance with Article (38) of the Implementing Regulations, the Company shall notify SAMA
of any person who owns five percent (5%) or more of the company through a quarterly report. Said person shall notify SAMA in writing of his
percentage ownership or any change thereof within five working of the date of occurrence of such event.

These restrictions will reduce the Company’s chances of attracting financial or strategic investors in the event of the Central Bank’s refusal or
delay in issuing the required approval or imposing conditions that the Company is not able to fulfill, which will result in a fundamental negative
impact on the Company’s operations and future expectations.

2.2.11 Risks Related to Competition

The insurance sector’s environment is an increasingly competitive one as the number of licensed insurance companies, as of the date of this
Prospectus, has reached (26) companies that are competing to increase their shares in the market. The Company’s share represents (0.9%) of the
insurance market for the year 2022G. The competitive position of the Company will depend on many factors, including its financial position,

26
the geographical scope of its business, business relations with customers, the volume of written insurance premiums, the issued insurance’s
terms and conditions, the provided services and products, the Company’s ability to design insurance programs according to the requirements of
the market, quick payment of claims, the Company’s reputation, experience and efficiency of the staff and their presence in the local market.

There can be no assurance that the Company will be able to achieve or maintain any particular level of premiums in this competitive
environment. Therefore, it is likely that the intense competition will have a material negative impact on the Company’s business, prospects and
financial condition through:

- Reducing margins and profitability.

- Hindering the growth of the Company’s customer base.
- Reducing market share.
- Increasing of the resignation of senior management members and sales personnel.
- Elevating operating expenses, such as sales and marketing expenses
- Increasing the costs of obtaining insurance policies.
There is no guarantee that the Company will consistently be able to compete with other Companies, such could lead to reduction of the
Company’s share in the market and thus negatively affect the Company’s profits and financial results.

2.2.12 Risks Related to the Insurance Market Growth

The growth of the insurance market in the Kingdom is influenced by several factors or events. The Company expects the current situation to
have a high or at least stable growth, especially that one of the key drivers of the insurance industry in the Kingdom is a result of an increase
in the number of insured, in conjunction with economic growth and increase of population in the Kingdom of Saudi Arabia, as well as the
continued development in the field of social care, demographic changes, and new decisions regarding the opening of the insurance market in
the Kingdom to foreign companies, and allowing them to establish branches in the Kingdom after obtaining the approval of the Central Bank.
Sector growth is generally considered hypothetical based on uncertain future expectations and beyond the Company’s control. If the insurance
sector or the various insurance categories do not witness the expected growth according to the Company’s expectations, this will negatively
affect the Company's revenues, returns, and business results.

2.2.13 Risks Related to the Lack of Cultural Awareness of Insurance and Its Importance
The society’s perception of the insurance sector is a key factor for the success of this sector. However, there are risks associated with the general
perspective of the sector; as the society sees that this sector does not play a fundamental role or operates in a range of services that are not
compliant with the principles of solidarity and Shariah. Society may lose confidence in the sector, which may negatively affect the Company’s
business, financial position, and future expectations.

2.2.14 Risks Related to the required reports

The Insurance Companies Control Law and its Implementing Regulations require the Company to submit to the Saudi Central Bank financial
statements and annual reports prepared on specific statutory accounting principles, and other information including information about the
Company’s general business operations, capital structure, ownership and financial position of the Company, including an annual statement of
total urgent commissions paid. The Company could be subject to regulatory actions, sanctions and fines if the Saudi Central Bank believes
that the Company has failed to comply with any applicable laws, regulations and instructions. Hence, any failure to comply with such laws,
regulations and instructions results in imposing significant restrictions on the Company’s ability to conduct its business or significant penalties
that could negatively affect the Company’s results of operations and financial condition.

The Company could also be subject to penalties and fines if it fails to meet the requirements of the Capital Market Authority, the Rules on the
Offer of Securities and Continuing Obligations and the disclosures required by the Saudi Exchange. This may negatively and substantially
affect the Company’s business, financial position and future expectations.

2.2.15 Risks Related to the obtainment of Approvals regarding the launch of New Products or
the Renewal of Existing Ones
Based on the Cooperative Insurance Companies Control Law and Implementing Regulations for offering new insurance products, the Company
is required to obtain the Saudi Central Bank’s approval before marketing or offering any new product. As of the date of this Prospectus, the
Company has obtained approvals from the Saudi Central Bank for selling (45) products.

Any delay in obtaining such approvals for new products or in approvals’ renewal for current products will have a negative and substantial
impact on the Company’s business, financial position, and future prospects.

2.2.16 Risks Related to the impact of Client trust’s decrease

Client trust in the insurance sector around the world is of great importance in enhancing the strength of this sector. On the other hand, any
decrease in the client’s trust in the insurance industry in general, or in the Company in particular, may result in an increase of insurance policy
cancellations and refunds, which will negatively affect the Company’s sales, and thus its financial conditions.

27
2.2.17 Risks Related to Lack of Control Over Prices
The Company is committed to follow the recommendations of the Saudi Central Bank and the actuarial advisor regarding the pricing of
insurance policies. The Company annually submits (based on the pricing adequacy report issued by the actuarial consultant) quotations to the
Saudi Central Bank.

Actuarial consultants issue pricing adequacy reports by studying the insurance portfolio owned by the Company, and based on actuarial data
that takes into account the performance of these insurance policies (while taking into account the performance of the insurance portfolio
in general). The recommendations of the actuarial consultant at that time may require changing the prices of the insurance policies for the
company’s portfolio, and such for the possible change of the insurance portfolio’s performance. The increase of prices of one of the Company’s
products will lead the Company being unable to attract new clients, and losing its current clients which will negatively affect the Company’s
share in the market, business, financial condition, operations’ results, profitability of its shares and its future prospects.

2.2.18 Risks Related to the Insurance Business Cycle

The global insurance industry has witnessed periodic changes with significant fluctuations in operating results due to competition, catastrophic
events, economic and social conditions and other factors beyond the control of Companies working in the insurance industry. That may result
in periods of price competition due to the excess of supply, and other periods during which companies can receive better premiums. In addition,
the increase in the frequency and severity of losses that affect the insured may have a significant impact on the aforementioned business cycle.
It is expected that the Company’s insurance business cycles will be negatively affected as a result of these factors, resulting in a negative impact
on the Company.

2.2.19 Risks Related to Adjustments to Accounting for Zakat and Income Tax by the Saudi
Central Bank
The financial statements for the fiscal years ended on December 31, 2020G, 2021G, 2022G, and the nine-month period ended on September
30, 2023G along with the notes attached thereto included in this Prospectus, have been prepared in accordance with International Financial
Reporting Standards (IFRS) approved in the Kingdom of Saudi Arabia and other standards and publications approved by the Saudi Organization
for Auditors and Accountants (SOCPA) based on the instructions issued by the Central Bank on 20/11/1440H (corresponding to 23/07/2019G)
which provide for updating the accounting policies for accounting for Zakat and income tax in the income statement, instead of calculating them
on a quarterly basis through shareholders’ equity in previously retained earnings. The Company has retrospectively adjusted the effect in line
with International Financial Reporting Standards (IFRS) (for additional information please refer to Section No. (5) “Financial Information
and Management Discussion and Analysis”).

The Company is required in this case to apply the amendments or changes to these standards from time to time. Consequently, any changes in
these standards or the mandatory application of some new standards may negatively affect the financial statements and thus the Company’s
financial results and financial position.

2.2.20 Risks Related to Value Added-Tax (VAT)

On 02/05/1438H (corresponding to 30/01/2017G), the Council of Ministers decided to approve the Unified Agreement for Value Added Tax for
the GCC, which came into force as of January 1, 2018G. This Law imposes an added value of (5%) on some products and services as a new
tax in addition to other taxes and other fees on specific sectors in the Kingdom, including the insurance sector in which the Company operates.
On 25/09/1441H (corresponding to 18/05/2020G), an increase in the value-added tax rate was approved from (5%) to (15%), and it took effect
on 10/11/1441H (corresponding to 01/07 /2020G).

Accordingly, the Company has to adapt to the changes resulting from the application of VAT, which includes its collection and delivery. Any
violation or wrong application of the Tax Law by the Company’s management will expose it to fines or penalties or may lead to damage to its
reputation. This will also increase costs and operating expenses, which could compromise the Company’s competitive position and the level
of demand for its products, which will have a negative and material impact on the results of the Company’s operations and future prospects.

2.2.21 Risks Related to the Imposition of New Fees or Taxes

Although the Company is not currently subject to any kind of taxes other than the Legal Zakat and VAT amounting to (15%) of the fees for the
services provided by the Company, other fees or may be imposed on Companies by the government in the future. Accordingly, if new corporate
taxes or fees are imposed other than those currently applied, this will negatively affect the Company’s net profits.

2.2.22 Risks Related to Compliance with Saudization and GOSI Requirements

The Ministry of Labor and Social Development has implemented the “Nitaqat” program, which is designed to encourage Companies to
employ Saudi citizens and increase their percentage of total employees of the Company. Under this program, the Company's compliance with
Saudization requirements is measured against the percentage of Saudi citizens working for the Company compared to the average Saudization
percentage in Companies operating in the same sector.

The Company has reached a Saudization percentage of (79.75%) as of December 2023G, it is currently placed under the “Platinum” range of
the “Nitaqat Mutawar Program”. However, there can be no guarantee, that the Company will continue to maintain the required Saudization
percentage within the legally prescribed levels. In the event of non-compliance with decisions issued in this regard, the Company will be

28
subject to penalties including the suspension of issuing of new work visas for expatriate employees necessary for the Company, stopping the
transfers of sponsorships for non-Saudi employees, and/or excluding the Company from participating in government tenders, which would
negatively affect the Company’s operation and operations’ results.

2.2.23 Risks Related to Government Fees Applicable to Non-Saudi Employees

During 2016G, the government approved a number of resolutions aiming to implement comprehensive reforms of the labor market in the KSA,
including the approval of imposing additional charges for every non-Saudi employee working for Saudi entity as of 01/01/2018G at the rate of
four hundred (400) Saudi Riyals per month for each non-Saudi employee in 2018G, increased to six hundred (600) Saudi Riyals per month in
2019G, and then to eight hundred (800) Saudi Riyals per month in 2020G. which will lead to an increase of the Company’s costs which will
negatively and substantially affect its business, financial performance, and operations’ results.

In addition, the government has imposed “Iqama” (residency) issuance and renewal fees for dependents and companions of non-Saudi
employees (accompanying fees), which became effective as of 01/07/2017G, noting that they gradually increased from one hundred SAR (100)
per month for each dependent in 2017G, until it reached SAR (400) per month for each dependent in 2020G. Consequently, the total fees that
the non-Saudi employee will bear on behalf of his family will lead to an increase in his cost of living and will push him to seek work in other
countries where the cost of living is lower. In such case, the Company will face difficulty in maintaining its non-Saudis employees and will be
forced to directly or indirectly bear these costs or part of them by raising non-Saudis’ wages and salaries, which will result in an increase in its
costs and will negatively affect the results of its operations.

It is worth mentioning that on 18/03/1442H (corresponding to 04/11/2020G), the Ministry of Human Resources and Social Development in the
KSA has launched the initiative improve the contractual relationship, entered into effect on 14/03/2021G, which aims to support the vision of
the Ministry of Human Resources and Social Development in building an attractive labor market, empower and develop human competencies
as well as work environment, and abolish the sponsorship system. The initiative provides three main services: the job mobility service, the
improvement of exit, return and final exit mechanisms, The initiative’s services include all foreign employees in private sector establishments
within specific controls that take into account the rights of both parties to the contractual relationship and the terms of the contract between
the employer and the foreign employee. The job mobility service allows the foreign employee to move to another job upon the termination of
his employment contract without the need for the employer’s approval. Accordingly, when this initiative enters into force, the Company does
not guarantee that it will maintain its cadres of non-Saudi employees and renew their contracts on satisfactory conditions to them, which will
encourage them to move to another job according to the above-mentioned mechanisms. If the Company fails to maintain its cadres of non-Saudi
employees or find replacements for them with the same skills and experience required, such will lead to an increase in its financial cost, which
would negatively and substantially affect the Company’s business, financial results and future prospects.

2.2.24 Risks Related to the Lack of Qualified Local Cadres in the Insurance Sector
The cadres available in the local market may not meet the Company’s needs of experienced employees. In the event that the Company fails
to attract qualified cadres from the local market, it will have to recruit employees from outside the Kingdom. However, the Company cannot
guarantee the obtainment of sufficient number of necessary work visas from the Ministry of Human Resources and Social Development,
especially in light of the requirements of Saudization. Such will create a high competition between insurance Companies to train and qualify
their cadres, ensure their continued survival and attract talent from the local market, which may result in an increase in wages that may
constitute an additional burden on the Company. Moreover, the Company’s inability to attract and retain qualified employees will hinder the
implementation of its business strategy, which will negatively affect the results of its operations and financial position.

2.2.25 Risks Related to Currency Exchange Rates

Risks related to currency exchange rates are due to fluctuations in financial investments due to changes in exchange rates. Companies exposed
to such risks often have dealings with parties outside the Kingdom in the currency of those parties knowing that most of the Company’s
transactions are conducted in Saudi Riyals and all of its revenues are generated from clients in the local market and currency. If the Company
receives any amounts from sales of its products or conducts any transactions in a foreign currency, it may be exposed to risks related to currency
exchange rates. In the event of any significant fluctuations in exchange rates, such will negatively affect the Company’s financial performance.

2.3 Risks Related to Offered Securities

2.3.1 Risks Related to Potential Fluctuation in the Price of Rights Issue

The Rights’ market price may be subject to significant fluctuations due to the change in factors affecting the Company’s Shares. These
fluctuations may be significant due to the difference between the permissible daily fluctuation rate (which is 10% rise and fall from the closing
price of the previous day) In addition, the trading price of Rights depends on the trading price of the Company’s Shares and the market’s
perception of the fair price of the Rights. These factors may negatively affect the trading price of the Rights.

2.3.2 Risks Related to Potential Fluctuations in Share Price

The market price of the Company’s Rights during the Offering period may not be indicative of the market price of the Company’s Shares after
the Offering. In addition, the Company’s share price may not be stable and could be significantly affected by fluctuations resulting from a
change of market conditions in connection with the Rights Issue or the Company’s existing Shares. These fluctuations may also result from
several factors including, among others, market conditions related to shares, poor performance of the Company, inability to implement future

29
plans, entry of new competitors into the market, announcements by the Company or its competitors concerning mergers, acquisitions or
strategic alliances changes made in the vision or estimations of experts and securities analysts concerning the market. .

There is no guarantee that the market price of the Company’s Shares will not be lower than the Offer Price. If this happens after the investors
subscribe for New Shares, such subscription may not be canceled nor amended; subsequently, the investors may immediately incur losses.
Moreover, there is no guarantee that a Shareholder will be able to sell his Shares at a price equal or higher than the Offer Price after subscribing
for the New Shares. Selling substantial quantities of Shares by the shareholders after the offering, or the expectation that these sales will occur,
may negatively affect the share price in the market. In addition, investors may not be able to sell their Shares in the market without such
negatively adversely affecting the share’s price.

2.3.3 Risks Related to Unprofitability or Sale of Rights

There is no guarantee of profitability of the share by trading it at a higher price. In addition, there is no guarantee that it will be sold at all, which
indicates that there is no guarantee of sufficient demand in the market to exercise the Rights Issue or receive compensation from the Company.

2.3.4 Risks Related to Future Data

The future results and performance data of the Company can’t be actually predicted and may differ from those contained in this Prospectus.
As the Company’s achievements and ability to improve determine the actual results, which can’t be expected or determined. The inaccuracy of
the data and results is one of the risks that the shareholder must identify so that it doesn’t affect his investment decision. If future results and
performance data are substantially different from the information included in this Prospectus, such will lead to shareholders losing part or all
of their investments in the Company’s shares.

2.3.5 Risks Related to the Issuance of New Shares

The issuance of any new shares (other than the Rights Issue mentioned in this Prospectus) by the Company depends on the approval of the
EGA of shareholders. In the event that the Company decides to issue New Shares as Rights Issue to increase its capital, and the EGA of
shareholders approves this decision, yet shareholders did not exercise their rights of subscribing to the New Shares, the ownership of shares
will proportionately decrease, in addition to the right to vote and receive profits, which will affect the market price of the share.

2.3.6 Risks Related to a Decrease in the Demand for Rights Issue and Company’s Shares
There is no guarantee that there will be sufficient demand for the Rights Issue during the Trading Period to enable the Rights Issue holder
(whether it is a Registered Shareholder or a new investor) to sell Rights and make a profit, or to sell the Rights in general. Moreover, there
is no guarantee that there will be sufficient demand for the Company’s shares by institutional investors during the Rump Offering Period.
If institutional investors do not submit purchase offers for the rump shares at a high price, there may not be sufficient compensation to be
distributed to Rights Issue holders who did not exercise their right to subscribe or to holders of fractional shares. Furthermore, there is no
guarantee that there will be sufficient demand in the market for the shares obtained by a subscriber either through the exercise of the Rights
Issue, the Rump Offering or the open market.

2.3.7 Risks Related to Ownership Percentage Decline

If the holders of the Rights Issue do not fully subscribe for the New Shares, their ownership percentage and voting rights will be reduced. In the
event that the registered holder of the Rights Issue wishes to sell its Rights during the trading period, there can be no guarantee that the returns
he receives will be sufficient to fully compensate him for the decrease of its ownership percentage in the Company’s capital as a result of its
capital increase. There is also no guarantee that there will be a compensation amount distributed to eligible shareholders who did not exercise
their right to subscribe or to holders of fractional shares in the event that the investment institutions during the remaining offering period did
not submit offers for the remaining shares at a high price, or if the compensation amount (if any) is sufficient to compensate for the decrease in
the percentage of ownership in the Company’s capital.

2.3.8 Risks Related to Not Exercising Subscription to Rights Issue in a Timely Manner
The subscription phase starts on Tuesday 26/12/1445H (corresponding to 02/07/2024G) and ends on Sunday 08/01/1446H (corresponding to
14/07/2024G). Right owners and financial intermediaries shall take appropriate measures to follow all necessary instructions before the end of
the subscription period. If eligible shareholders are not able to properly exercise their subscription rights by the end of the subscription period
according to the Rights Issue they hold, there can be no guarantee that a compensation amount will be allocated to eligible shareholders who
have not participated or who did not carry out the procedures to exercise the subscription properly nor to the owners of fractional shares.

2.3.9 Risks Related to Dividend Distribution to Shareholders

Future dividends depend on several factors, including the company’s profitability profits, maintaining its financial position, capital needs,
distributable reserves, the credit strength available to the Company and general economic conditions. Moreover, increasing the company’s
capital –may lead to a decrease in earnings per share in the future on the grounds that the Company’s profits will be distributed among a larger
number of shares as a result of the increase in its capital.

30
The Company does not guarantee any dividends on the shares that will actually be distributed, nor does it guarantee the amount that will be
distributed in any given year. The distribution of dividends is also subject to some conditions and restrictions stipulated in the Company’s
By-laws.

2.3.10 Risks Related to Speculation in Rights Issue

Speculation in Rights Issue is subject to risks that could cause substantial losses The permissible daily fluctuation range for rights Issue trading
price exceeds the permissible daily fluctuation range for the market price (which represents in 10% increase and decrease of the closing price
of the previous day). There is a direct relationship between the Company’s share price and the Right’s indicative value. Accordingly, the
indicative value of rights reflects the difference between the market value of the Company’s share during the trading period and the Offer Price.
If the shareholder doesn’t sell, he will have two options, either to exercise these Rights to subscribe for the New Shares before the end of the
subscription period, or to refrain from exercising these Rights. In the event of not exercising the Rights, the investor may be subject to a loss
or decrease in the value of his investment portfolio, or profit if he sells shares during the Rump Offering Period at a price higher than the Offer
Price. Therefore, investors must review the full details of the mechanism of listing and trading new Rights and Shares and their method of
operation, and become familiar with all the factors affecting them, in order to ensure that any investment decision is based on full awareness,
(for additional information, please refer to Section No. (12) “Information Related to Shares and Terms and Conditions of the Offering” of
this Prospectus).

2.3.11 Risks Related to the Lack of Shareholders’ Awareness of the Trading Mechanism and
Exercise of Rights Issue
The trading of Rights Issue is a new market for some investors in Tadawul. Thus, many investors may not be familiar with the mechanism of
trading and be discouraged to invest and trade in Rights Issue. In this case, their ownership percentage in the Company will decrease, which
will negatively affect those who did not exercise their rights to subscribe, especially if no compensation is distributed to them. This happens
when investment institutions do not submit their offers at a price higher than the Offer Price of ten SAR (10) in the remaining offering period.

2.3.12 Risks related to Suspending Trading or Cancelling the Company’s Shares as a Result of
Not Publishing Its Financial Statements within the Statutory Period
In the event that the Company fails to publish its financial information within the statutory period (thirty days from the end of the financial
period for the initial financial statements, and three months from the end of the financial period for the annual financial statements), the
procedures for suspending the listed securities will be applied in accordance with the listing rules which states that the Market suspends the
trading of securities for a period of one trading session following the end of the statutory period. If the financial information is not published
within twenty trading sessions following the first suspended trading session, the Saudi Tadawul Company will announce the re-suspension of
the Company’s securities until it announces its financial results. In case the suspension of trading the Company’s shares continues for a period
of six months, and the Company didn’t take the appropriate measures to correct that suspension, the Authority may cancel the listing of the
Company’s securities. The Saudi Tadawul Company will lift the suspension after one trading session has passed following the announcement
of the Company’s financial results. However, if the Company is late in announcing its financial results, or if it fails to publish them within the
abovementioned statutory period, the Company’s shares will be suspended or the listing of its shares will be cancelled. Such will negatively
and substantially affect the interest of the Company’s shareholders and reputation and the operations’ results.

In addition, the Authority may cancel the offering of the Company’s Rights Issue Shares if it deems that the offering may not be in the interest
of the shareholders.

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3. Company Overview and Nature of Business

3.1 Company Overview

Al Sagr Cooperative Insurance Company is a Saudi public joint stock company, established pursuant to Royal Decree No. (M/11) dated
16/02/1428H (corresponding to 06/03/2007G) and Ministerial Resolution No. (63) dated 15/02/1428H (corresponding to 05 /03/2007G)
and the license of the Saudi Central Bank No. (TNM/13/20083) dated 23/03/1429H (corresponding to 31/03/2008G) to practice insurance
activity in accordance with the provisions of the Cooperative Insurance Companies Control Law and its Implementing Regulations, and it is
registered in the Commercial Register in the city of Al Khobar according to Certificate No. (2051036871) dated 22/03/1429H (corresponding
to 30/03/2008G).

3.2 Major Changes in the Company’s Capital

- On 03/02/1426H (corresponding to 10/02/2008G), all of the Company’s shares were registered and listed on the main market
with a capital of two hundred million (200,000,000) Saudi Riyals divided into twenty million (20,000,000) shares with
nominal value of ten (10) Saudi Riyals per share.
- On 26/06/1434H (corresponding to 06/05/2013G), the EGA approved an increase in the Company’s capital by fifty million
(50,000,000) Saudi Riyals by granting one bonus share for every (4) outstanding shares, provided that the value of the capital
increase is paid by transferring fifty million (50,000,000) Saudi Riyals from retained earnings, so that the Company’s capital
becomes two hundred and fifty million (250,000,000) Saudi Riyals divided into twenty-five million (25,000,000) shares
with a nominal value of ten (10) Saudi Riyals per share, based on the recommendation of the Board of Directors issued on
20/04/1434H (corresponding to 03/02/2013G) and the Saudi Central Bank’s (SAMA) no-objection letter.
- On 16/11/1439H (corresponding to 29/07/2018G), the EGA approved an increase in the Company’s capital by two hundred
fifty million (250,000,000) Saudi Riyals divided into twenty-five million (25,000,000) shares with a nominal value of ten
(10) Saudi Riyals per share, with a value of one hundred fifty million (150,000,000) Saudi Riyals by granting (3) bonus shares
for every (5) outstanding shares, provided that the capital increase is paid by capitalizing the amount of one hundred and
fifty million (150,000,000) Saudi Riyals (the amount of one hundred and nineteen million (119,000,000) Saudi Riyals from
the retained earnings account and the amount of thirty-one million (31,000,000) Saudi Riyals from the statutory reserve, so
that the company’s capital becomes four hundred million (400,000,000) Saudi Riyals divided into forty million (40,000,000)
shares with a nominal value of ten (10) Saudi Riyals per share, based on the recommendation of the Board of Directors issued
on 14/08/1439H (corresponding to 30/04/2018G) and the Saudi Central Bank’s (SAMA) no-objection letter.
- On 05/02/1444H (corresponding to 01/09/2022G), the Board of Directors decided to recommend to the EGA a capital
reduction from four hundred million (400,000,000) Saudi Riyals divided into forty million (40,000,000) shares with a
nominal value of ten (10) Saudi Riyals per share to one hundred and forty million (140,000,000) Saudi Riyals divided into
fourteen million (14,000,000) shares with a nominal value of ten (10) Saudi Riyals per share, i.e., a reduction rate of (65%) in
order to restructure the Company’s capital to amortize (100%) of its accumulated losses which reached (65%) of the paid-up
capital, by canceling twenty-six million (26,000,000) shares of the Company’s shares. On 24/02/1444H (corresponding to
20/09/2022G), the Company received the Saudi Central Bank’s letter No. (44015739) containing its approval to reduce the
Company’s capital by two hundred and sixty million (260,000,000) Saudi Riyals, so that the capital becomes one hundred and
forty million (140,000,000) Saudi Riyals. Then the Company submitted a file to the CMA requesting approval to reduce the
capital on 25/02/1444H (corresponding to 21/09/2022G) and obtained it on 09/03/1444H (corresponding to 05/10/2022G).
The EGA held on 17/03/1444H (corresponding to13/10/2022G) approved capital reduction from four hundred million
(400,000,000) Saudi Riyals divided into forty million (40,000,000) shares with a nominal value of ten (10) Saudi Riyals
per share to one hundred forty million (140,000,000) Saudi Riyals divided into fourteen million (14,000,000) shares with a
nominal value of ten (10) Saudi Riyals per share with a value of two hundred and sixty million (260,000,000) Saudi Riyals.
- On 30/08/1444H (corresponding to 22/03/2023G), the Company signed a binding merger agreement with Gulf Union Al
Ahlia Cooperative Insurance Company, which revolves around merging Al Sagr Insurance Company into the Gulf Union Al
Ahlia Cooperative Insurance Company through the issuance of sixteen million one hundred and twenty-four thousand three
hundred and seventeen (16,124,317) new shares in Gulf Union Al Ahlia Cooperative Insurance Company in exchange for full
capital shares of Al Sagr Cooperative Insurance Company. Consequently, the termination of Al Sagr Cooperative Insurance
Company, in accordance with the letter of no objection from the General Authority for Competition to complete the economic
concentration process No. (471) dated 04/07/1444H (corresponding to 26/01/2023G) and the Central Bank’s approval of
the proposed merger process was issued under No. (440946454) dated 29/12/1444H (corresponding to 17/07/2023G). On
14/02/1445H (corresponding to 30/08/2023G), the EGA of Shareholders resolved to not approve the provisions of the merger
agreement.

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3.3 Company’s Main Activities
The Company carries out its activity according to the Commercial Registration certificate No. (2051036871) dated 22/03/1429H (corresponding
to 30/03/2008G). The Company’s activities, according to this certificate, are: health insurance, general insurance. The purposes of the Company,
in accordance with its bylaws, are to engage in cooperative insurance business and all related to activities, such as reinsurance, agencies,
representation, correspondence, or mediation. The Company may carry out all activities deemed necessary to achieve its purposes, whether in
the field of insurance or investing its funds, and to own and move fixed funds and cash items, sold, exchanged or leased by it directly or through
companies it establishes or purchases with other parties. The Company carries out its activities in accordance with the Cooperative Insurance
Companies Control Law and its Implementing regulations and the provisions issued by the regulatory authority and the regulations and rules in
force in the Kingdom of Saudi Arabia and upon obtaining the necessary licenses from the competent authorities, if any.

The Company also carries out its activities under the license of the Saudi Central Bank No. (TMN/13/20083) dated 23/3/1429H (corresponding to
31/3/2008G), which was renewed on 14/11/1443H (corresponding to 13/6/2022G) for three (3) years starting from 20/3/1444H (corresponding
to 16/10/2022G) and ending on 19/7/1447H (corresponding to 8/1/2026 G), in order to practice insurance activity in accordance with the
provisions of the Cooperative Insurance Companies Control Law and its executive regulations in the general insurance and health insurance
branches.

The most important insurance services provided by the Company are as follows:

- Health insurance
- Property insurance
- Travel insurance
- Marine insurance
- Engineering insurance
- Vehicle/Motor insurance
- Medical malpractice insurance
- Liability insurance
- Miscellaneous accident insurance
- Energy insurance

3.4 Founding Shareholders

The table below outlines the ownership of the Company upon its incorporation:

Table No. (9): Ownership Structure Upon Incorporation

Number of Ownership
Founding Shareholders Nationality Book v\Value
Shares Percentage

Al Sagr National Insurance Company Emirati 5,200,000 52,000,000 26.00%

Redland Arabian Industrial Services Company Limited Saudi 1,000,000 10,000,000 5.00%

Abdullah Rasheed Al Rasheed and Son Company Saudi 1,000,000 10,000,000 5.00%

Mahmoud Muhammad Nashar Holding Company Saudi 600,000 6,000,000 3.00%

Al Turki Medical Group Company Saudi 600,000 6,000,000 3.00%

Abdul Rahman Hassan Abbas Sharbatly Saudi 400,000 4,000,000 2.00%

Khaled Falih Abdulaziz Al-Saadoun Saudi 400,000 4,000,000 2.00%

Al Fanar Company Saudi 400,000 4,000,000 2.00%

Al-Mozoon Architectural Contracting Group, owned by Faisal bin Saud bin

Saudi 400,000 4,000,000 2.00%
Mohammed Al Saud

Amwal Al Khaleej Marine Investment Company Saudi 400,000 4,000,000 2.00%

Khaled Abdul Latif Al-Fawzan Saudi 220,000 2,200,000 1.10%

Sammam Foundation, owned by Abdulaziz Ahmed Mohammed Zidan Saudi 200,000 2,000,000 1.00%

The Saudi Trading and Maintenance Services Corporation, owned by Nabil

Saudi 200,000 2,000,000 1.00%
Ahmed Akbar Ali Reda

33
 Number of Ownership
Founding Shareholders Nationality Book v\Value
Shares Percentage

Abdul Latif Ahmed Al Fawzan and Sons Company Saudi 180,000 1,800,000 0.90%

Shehab Fahd Hassan Al-Shobokshi Saudi 136,000 1,360,000 0.68%

Shadi Fahd Hassan Al Shobokshi Saudi 132,000 1,320,000 0.66%

Shaima Fahd Hassan Al-Shobokshi Saudi 132,000 1,320,000 0.66%

Total Founding Shareholders 11,600,000 116,000,000 58.00%

Public 8,400,000 84,000,000 42.00%

Total 20,000,000 200,000,000 100.00%

Source: The Company

3.5 Substantial Shareholders

As of the date of this Prospectus, the Company has one Substantial Shareholder, which is Al Sagr National Insurance Company (an Emirati
public joint stock company), owning (26%) of the Company’s shares.

3.6 Company’s Vision

“Our company aspires to be a leader in providing insurance products and services in the KSA based on high standards of quality, and to be
distinguished by ethical practices, justice and responsibility towards society.”

3.7 Company’s Mission

“We strive to provide reliable protection and be the right hand for our customers in times of distress.”

The Company’s mission focuses on a commitment to meeting customer needs and providing high-quality and reliable insurance services. The
Company aims to be the trusted and specialized customers’ partner in all insurance products.

3.8 Company’s Strategy

Al Sagr Cooperative Insurance Company’s strategy strives to provide innovative, high-quality insurance services to meet customers’ needs and
achieve competitive excellence, according to the following:

- Expanding insurance services: Providing a wide range of insurance services that include health insurance, general
insurance, and vehicle/motor insurance. This allows the Company to meet diverse customers’ needs and provide tailored
insurance solutions.
- Investing in technology: Developing advanced business management systems and using graphical analytics to improve
operational processes and enhance customers’ experience.
- Interaction with customers: Providing exceptional customer service through multiple channels such as phone, email, and
social media channels and responding promptly. The response must be quick and effective to meet customers’ needs and
immediately solve their problems.
- Offering Unique products and services: Providing comprehensive insurance coverage, flexibility in contracting, and
customized insurance options to meet different customers’ needs. Products and services must be competitive in terms of
quality, cost and added value.
- Partnerships and distribution: Developing strategic partnerships with local insurance agents to expand customers’ base
and reach different market segments. New distribution technologies such as online selling and mobile applications can be
explored to facilitate the purchasing process and provide insurance services conveniently and efficiently.
- Improving risk management: Developing an effective risk management strategy that helps reduce potential risks and
improve the efficiency of risk analysis and pricing. The Company must be able to provide comprehensive and efficient
insurance coverage to customers as well as support in the event of accidents or claims.
- Data analysis and predictive analytics: Using data analysis and predictive analytics techniques to understand customers’
needs and guide marketing and insurance decisions. Available data can be used to improve selection, pricing and distribution
processes.

34
3.9 Company’s Strengths and Competitive Advantages
Since its establishment in 1983G, Al Sagr Cooperative Insurance Company has gained nearly four decades of experience in providing excellent
insurance products and services with the highest quality standards to its customers. From early beginnings, the Company has firmly established
its vision in the Saudi market and succeeded in building a good reputation and a great trust among individuals and companies alike. Believing
in the value of continuous growth and development, Al Sagr Company sought to be the first choice for insurance in the KSA through innovation
and the provision of distinguished services to its clients by using the latest technologies to always be up-to-date with new business methods.
The Company is also committed to taking an ethical approach to the market and being a socially responsible entity.

3.10 Products and Services

The Company provides cooperative insurance services and related activities in the KSA. Its main activity includes all categories of general
and health insurance. The Company offers its products through (43) policies divided into (6) segments: medical insurance, property insurance,
engineering insurance, accident and liability insurance, marine insurance and vehicle/motor insurance.

The Company has obtained the Saudi Central Bank’s final approvals (this authority has been transferred to the Insurance Authority as of the
date of this Prospectus) for the following programs:

Table No. (10): Summary of the Company’s Products and Services

Product Class (Individual, Date of Central Number of Central Product Identification

Number Policy Name
Corporate, or Both) Bank Approval Bank Letter Number (if any)

03/02/1430H
Medical Insurance (CCHI
1 Individuals - Companies (corresponding to 166/IS/6262 A-SAGR-2-C-09-038
Healthcare)
29/01/2009G)
14/03/1438H
2 Property All Risks Individuals - Companies (corresponding to 381000028934 A-SAGR-1-B-13-004
13/12/2016G)
14/03/1438H
3 Fire Insurance Individuals - Companies (corresponding to 381000028840 A-SAGR-1-B-16-005
13/12/2016G)
14/03/1438H
Loss of Profits following
4 Individuals - Companies (corresponding to 381000028878 A-SAGR-1-B-16-006
Property Loss
13/12/2016G)
14/03/1438H
5 Contractor’s All Risks Companies (corresponding to 381000028831 A-SAGR-1-C-16-007
13/12/2016G)
14/03/1438H
6 Erection All Risks Companies (corresponding to 381000028842 A-SAGR-1-C-16-008
13/12/2016G)
14/03/1438H
Contractor’s Plant & Machinery
7 Companies (corresponding to 381000028856 A-SAGR-1-C-16-009
Insurance
13/12/2016G)
14/03/1438H
Boiler and Pressure Vessels
8 Companies (corresponding to 381000028836 A-SAGR-1-C-16-010
Insurance
13/12/2016G)
14/03/1438H
9 Burglary Insurance Companies (corresponding to 381000028835 A-SAGR-1-C-16-011
13/12/2016G)
14/03/1438H
Comprehensive General
10 Companies (corresponding to 381000028833 A-SAGR-1-C-16-012
Liability Insurance
13/12/2016G)
Deterioration of Stock 14/03/1438H
11 Following Machinery Companies (corresponding to 381000028851 A-SAGR-1-C-16-013
Breakdown 13/12/2016G)
14/03/1438H
12 Electronic Equipment Insurance Companies (corresponding to 381000028846 A-SAGR-1-C-16-014
13/12/2016G)
14/03/1438H
Energy- On/Offshore Property
13 Companies (corresponding to 381000028828 A-SAGR-1-C-16-015
Including Loss of Production
13/12/2016G)
14/03/1438H
14 Finance Gap Insurance Companies (corresponding to 381000028838 A-SAGR-1-C-16-016
13/12/2016G)

35
 Product Class (Individual, Date of Central Number of Central Product Identification
Number Policy Name
Corporate, or Both) Bank Approval Bank Letter Number (if any)

14/03/1438H
Marine Land Transit (Open
15 Companies (corresponding to 381000028901 A-SAGR-1-C-16-017
Policy)
13/12/2016G)
14/03/1438H
Marine Land Transit (Single
16 Companies (corresponding to 381000028899 A-SAGR-1-C-16-018
Trip)
13/12/2016G)
14/03/1438H
17 Marine Cargo Open Cover Companies (corresponding to 381000028868 A-SAGR-1-C-16-019
13/12/2016G)
14/03/1438H
18 Marine Cargo Single Shipment Companies (corresponding to 381000028862 A-SAGR-1-C-16-020
13/12/2016G)
14/03/1438H
19 Marine Hull and Machinery Companies (corresponding to 381000028859 A-SAGR-1-C-16-021
13/12/2016G)
14/03/1438H
Machinery Breakdown
20 Companies (corresponding to 381000028877 A-SAGR-1-C-16-022
Insurance
13/12/2016G)
14/03/1438H
Loss of Profit following
21 Companies (corresponding to 381000028870 A-SAGR-1-C-16-023
Machinery Breakdown
13/12/2016G)
14/03/1438H
Medical Malpractice - Hospitals
22 Companies (corresponding to 381000028893 A-SAGR-1-C-16-024
and/or Institutions
13/12/2016G)
14/03/1438H
Medical Malpractice -
23 Individuals (corresponding to 381000028886 A-SAGR-1-I-16-025
Individuals
13/12/2016G)
14/03/1438H
24 Personal Accident Insurance Individuals - Companies (corresponding to 381000028945 A-SAGR-1-B-16-026
13/12/2016G)
14/03/1438H
Professional Indemnity
25 Companies (corresponding to 381000028881 A-SAGR-1-C-16-027
(Financial Advisors)
13/12/2016G)
14/03/1438H
Professional Indemnity
26 Companies (corresponding to 381000028903 A-SAGR-1-C-16-028
(Architects and Civil Engineers)
13/12/2016G)
14/03/1438H
Professional Indemnity
27 Companies (corresponding to 381000028913 A-SAGR-1-C-16-029
(Financial Advisors)
13/12/2016G)
14/03/1438H
Professional Indemnity
28 Companies (corresponding to 381000028930 A-SAGR-1-C-16-030
(Insurance Brokers and Agents)
13/12/2016G)
14/03/1438H
29 Public Liability Insurance Companies (corresponding to 381000028941 A-SAGR-1-C-16-031
13/12/2016G)
14/03/1438H
30 Public and Products Liability Companies (corresponding to 381000028937 A-SAGR-1-C-16-032
13/12/2016G)
14/0931438H
31 Travel Insurance Individuals - Companies (corresponding to 381000028943 A-SAGR-1-B-16-033
13/12/2016G)
20/06/1430H
32 Money Insurance Companies (corresponding to 864/IS/ A-SAGR-1-C-13-034
13/06/2009G)
10/10/1430H
33 Fidelity Guarantee Insurance Companies (corresponding to 1307/IS/48553 A-SAGR-1-C-09-035
29/09/2009G)
26/09/1430H
Workmen’s Compensation and
34 Companies (corresponding to 1286/IS/47706 A-SAGR-1-C-09-036
Employers Liability
16/09/2009G)
20/05/1434H
35 Commercial Motor Insurance Individuals - Companies (corresponding to 341000063752 A-SAGR-1-B-13-001
01/04/2013G)

36
 Product Class (Individual, Date of Central Number of Central Product Identification
Number Policy Name
Corporate, or Both) Bank Approval Bank Letter Number (if any)

15/02/1430H
36 Private Motor Insurance Individuals – Companies (corresponding to 212/IS/8065 A-SAGR-1-B-09-003
10/02/2009G)
19/02/1437H
37 Motor Third Party Liability Individuals - Companies (corresponding to 371000020874 A-SAGR-1-B-15-002
01/12/2015G)
07/01/1437H
38 Visitors Insurance Individuals (corresponding to 371000002612 A-SAGR-2-I-15-039
20/10/2015G)
01/05/1430H
39 Plate Glass Insurance Companies (corresponding to 618/IS/22188 A-SAGR-1-C-09-037
26/04/2009G)
28/07/1442H
Directors and Officers Liability
40 Individuals (corresponding to By Email F-SAGR-1-C-21-040
Insurance
12/03/2021G)
28/07/1442H
41 Political Violence Insurance Individuals (corresponding to By Email F-SAGR-1-C-21-041
12/03/2021G)
22/03/1443H
42 Parcel Insurance Product Individuals - Companies (corresponding to By Email F-SAGR-1-C-21-042
28/10/2021G)
01/04/1445H
43 Craftsmen Liability Insurance Individuals - Companies (corresponding to By Email P-SAGR-1-B-23-044
16/10/2023G)
16/08/1444H
Al Sagr Plus Motor Insurance
44 Individuals (corresponding to Final Approval P-SAGR-1-I-23-043
-Individual
08/03/2023G)
20/05/1445H
45 Domestic Helpers Insurance Individuals (corresponding to By Email P-SAGR-1-I-23-045
04/12/2023G)
Source: The Company

3.11 Future Products

The Company continuously evaluates opportunities to provide new products, whether individual, commercial, family, or general, to meet the
requirements of individual, corporate, and institutional customers, in accordance with the provisions of the Cooperative Insurance Companies
Control Law and its Implementing Regulations. As of the date of this Prospectus, the Company is studying potential insurance products to
offer in the future.

37
3.12 Reinsurers
The Company deals with several reinsurance companies classified by Standard & Poor’s (S&P) and (AM BEST), whose rating is not less than
the stable level and are approved by the Saudi Central Bank under the scope of classified local and international reinsurance companies that
Saudi insurance companies can deal with it. The Saudi Central Bank also accredits reinsurers rated by Moody’s Investors Service and Fitch
Ratings. If the Company wants to deal with reinsurers that are not accredited by the Central Bank, it must obtain written approval from it. The
ratings indicate the strength of the reinsurance company’s financial position and its efficiency in covering claims, in addition to the quality of
its service and the strength of its reinsurance programs. The Company contracted with several international reinsurance companies (for more
information, please refer to Subparagraph (9.7.5) “Reinsurance Contracts” from Paragraph (9.7) “Summary of Material Agreements” of
Section (9) “Legal Information”) to reduce insurance business risks and ensure the stability of operations and capital resources, and reduce
the risk of losses and stabilize profitability.

The table below outlines a list of the most important reinsurers that the Company dealt with for the year 2023G:

Table No. (11): Reinsurers

Name Nationality Rating Rating Agency

The Year 2023G

AXA France AA- S&P

CCR France AA S&P

Chaucer United Kingdom A+ S&P

Deutsche Rückversicherung AG Germany A+ S&P

Gen Re France AA- S&P

HANNOVER RE Germany AA- S&P

Helvetia Switzerland A+ AM Best

Korean Re South Korea A S&P

R+V AG Germany AA- S&P

RGA United States of America AA- S&P

SAUDI RE Kingdom of Saudi Arabia A3 MOODY’S

SCOR France A+ S&P

TOA Re Japan A+ S&P

ARAB WAR RISK INSURANCE SYNDICATE Bahrain B++ AM Best

Source: The Company

38
3.13 Marketing and Distribution
The Company markets its products within the framework of supporting its vision and goals and enhancing the value of its products and services
to current and potential customers. It seeks to develop sales volume through its geographic spread in the Kingdom of Saudi Arabia, as it
offers products and services from its head office located in the city of Al Khobar in addition to (9) branches and (17) points of sale distributed
throughout the KSA.

The below table outlines the Company’s commercial registers:

Table No. (12): The Company’s Commercial Registers

Certificate
Number Trade Name Issue Date Expiry Date Issuer
Number

07/09/1429H 07/09/1445H Ministry of Commerce -

Al Sagr Cooperative Insurance
1 4030182618 (corresponding to (corresponding to Commercial Register Office in
Company
07/09/2008G) 17/03/2024G) the city of Jeddah
11/06/1433H 11/06/1446H Ministry of Commerce -
Al Sagr Cooperative Insurance
2 5950022375 (corresponding to (corresponding to Commercial Register Office in
Company
02/05/2012G) 12/12/2024G) the city of Najran
22/12/1438H 22/12/1445H Ministry of Commerce -
Al Sagr Cooperative Insurance
3 3350044740 (corresponding to (corresponding to Commercial Register Office in
Company
13/09/2017G) 28/06/2024G) the city of Hail
29/01/1433H 29/01/1446H Ministry of Commerce -
Al Sagr Cooperative Insurance
4 3550027342 (corresponding to (corresponding to Commercial Register Office in
Company
24/12/2011G) 04/08/2024G) the city of Tabuk
02/03/1434H 02/03/1446H Ministry of Commerce -
Al Sagr Cooperative Insurance
5 5800014660 (corresponding to (corresponding to Commercial Register Office in
Company
14/01/2013G) 05/09/2024G) the city of Al Bahah
26/01/1429H 21/03/1446H Ministry of Commerce -
Al Sagr Cooperative Insurance
6 1010243765 (corresponding to (corresponding to Commercial Register Office in
Company
04/02/2008G) 24/09/2024G) the city of Riyadh
04/05/1435H 04/05/1446H Ministry of Commerce -
Al Sagr Cooperative Insurance
7 5900027845 (corresponding to (corresponding to Commercial Register Office in
Company
05/03/2014G) 06/11/2024G) the city of Jazan
02/03/1434H 02/03/1446H Ministry of Commerce -
Al Sagr Cooperative Insurance
8 1131046600 (corresponding to (corresponding to Commercial Register Office in
Company
14/01/2013G) 05/09/2024G) the city of Buraydah
Ministry of Commerce -
02/03/1434H 02/03/1446H
Al Sagr Cooperative Insurance Commercial Register Office
9 4650060439 (corresponding to (corresponding to
Company in the city of Al-Madinah Al-
14/01/2013G) 05/09/2024G)
Munawwarah
Source: The Company

39
3.14 Distribution of Company’s Revenues
The Company’s revenues are distributed as shown in the tables below:

Table No. (13): Distribution of Revenues According to Insurance Types

December 31, 2020G December 31, 2021G December 31, 2022G September 30, 2023 G
Insurance Types
Revenues Percentage Revenues Percentage Revenues Percentage Revenues Percentage
(SAR) (%) (SAR) (%) (SAR) (%) (SAR) (%)

Medical Insurance 209,514,331 55 151,894,601 35 232,192,466 49 169,167,037 46

Vehicle Insurance 123,991,709 33 233,842,820 53 191,140,559 40 136,014,169 37

properties Insurance 18,324,955 5 17,008,239 4 18,105,032 4 18,260,866 5

Engineering Insurance 7,141,569 2 11,032,644 3 11,183,045 2 11,113,007 3

Accident Insurance 9,991,816 3 17,878,563 4 18,334,896 4 29,449,898 8

Marine Insurance 2,011,145 1 986,152 0 1,159,055 0 1,132,232 0

Cargo Insurance 8,138,133 2 5,657,401 1 3,149,421 1 166,558 0

Total 379,113,658 100 438,300,420 100 475,264,421 100 365,303,767 100

Source: The Company

Table No. (14): Distribution of Revenues According to Geographical Regions

December 31, 2020G December 31, 2021G December 31, 2022G September 30, 2023 G
Regions
Revenues Percentage Revenues Percentage Revenues Percentage Revenues Percentage
(SAR) (%) (SAR) (%) (SAR) (%) (SAR) (%)

Central Region 55,069,045 14.5 43,213,041 9.8 75,806,716 15.9 67,101,683 18.3

Eastern Region 246,555,947 65 353,171,149 80.5 337,988,872 71.1 226,342,902 61.9

Western Region 77,488,666 20.45 41,915,960 9.6 61,468,886 12.9 71,859,182 19.6

Total 379,113,658 100 438,300,420 100 475,264,421 100 365,303,767 100

Source: The Company

Table No. (15): Distribution of Revenues According to Classification of Insurance Classes

December 31, 2020G December 31, 2021G December 31, 2022G September 30, 2023 G
Classification of Insur-
ance Classes Revenues Percentage Revenues Percentage Revenues Percentage Revenues Percentage
(SAR) (%) (SAR) (%) (SAR) (%) (SAR) (%)

Individuals 100,909,894 27 204,045,738 47 135,738,982 29 72,392,783 20

Enterprises /Entities and Companies

Micro-enterprises 57,063,146 15 23,906,742 5 37,644,285 8 21,481,112 6

Small-sized Enterprises 92,025,285 24 64,665,115 15 100,044,307 21 70,674,706 19

Medium-sized Enterprises 60,670,874 16 46,197,216 11 71,834,681 15 44,178,079 12

Large Enterprises 68,444,459 18 99,485,609 23 130,002,2019 27 156,577,087 43

Total 379,113,658 100 438,300,420 100 475,264,421 100 365,303,767 100

Source: The Company

40
3.15 Business Interruption
There was no interruption in the Company’s business that could have had or would have had a material impact on the financial position during
the last twelve (12) months.

3.16 Employees and Saudization

As at the date of this Prospectus, the number of employees reached (248) employees, including (195) Saudi employees and (53) non-Saudi
employees, resulting in a Saudization percentage of (79.75%). The Company is classified as medium category (c), and carry out the activity of
(business services), and currently falls under the Platinum range.

41
4. Organizational and Administrative structure

4.1 Company’s Organizational Structure

The Company has an organizational structure that determines the division of departments and distribution of authorities and responsibility
duties among its division. The Company’s administrative structure consists of the Board of Directors and a team of senior executives (Senior
Management). The organizational structure is headed by the Board of Directors and supported by the senior management, which is responsible
for supervising the daily management of the Company. The Board is also responsible for setting comprehensive plans, strategies and main
objectives, as well as directing and controlling the performance of the Company’s executive management, suggesting appropriate decisions on
matters issues and actions that are within the competence of the general assembly of shareholders, and provides general guidance and control
over the Company. The Board has delegated the responsibility of implementing the strategic plans and managing the Company’s day-to-day
business to the Executive/Senior Management, by the Managing Director, as well as directly oversees the implementation of necessary policies
and procedures to ensure the efficiency and effectiveness of the Company’s management, the internal control system and the prevention of
risks to the maximum extent possible. In addition to the Audit Committee, the Company has a Remuneration and Nomination Committee,
Risk Committee, an Executive Committee and Investment Committee whose task is to submit reports to the Board of Directors. The Board of
Directors, is responsible for managing the company’s daily operations and has specific authorities delegated to them.

The following is an illustration outlining the current organizational structure of the Company that was approved by the Board of Directors on
12/07/1445H (corresponding to 25/01/2024G):

Figure No. (1): The Company’s Organizational Structure

Executive Committe

Board Of Secretary
Chairman & Directors InvestmentCommitte

Legal Affairs Remun & Num Committe

Project Management Managing Director

Office Audit Committe

Strategy & Development Risk Committe

Internal Audit Dept. Compliance Dept

Actuarial Dept Marketing Dept Information Tec Division Customer Services Dept Cyber Securty Dept Technical Division Finance Dept Risk Management Dept Shared Services Devision Commercial Devision

Infrastructure Sect Contact Sec Data Analysis Sec Motor Insurance Dept Credit Controller Sect Business Continuity Sect Human Resource Dept Regional Branches

Applications Sect Complaint Sec Medical Insurance Dept Investment Sec Support Services Dept Broker Relations

Support Sect General Insurance Dept Accounting Sect Procurement Dept Digital Sales Sect

Online Applications Sect Re-insurance Dept Warehous Dept POS & Agent Sect

Insurance Operation Dept

Source: The Company

42
4.2 Board of Directors
- In accordance with Article (15) of the Bylaws, the Company is managed by a Board of Directors consisting of (9) members
elected by the Ordinary General Assembly of shareholders for a period not exceeding three (3) years. The composition of
the Board of Directors must reflect an appropriate representation of independent members, and in all cases the number
of independent Board members may not be less than two or one-third of the Board members, whichever is more. This
appointment does not prejudice the right of the legal person to replace someone who represents him in the Board, and
members may be re-elected for similar terms.
- On 08/05/1445 H (corresponding to 22/11/2023 G), the OGA approved the election of the Board members for its current term,
which begins on 09/05/1445 H (corresponding to 23/11/2023 G) for a period of three (3) years that expires on 12/06/1448 H
(corresponding to 22/11/2026 G). On 02/03/1445 H (corresponding to 17/09/2023 G), the Company obtained the approval of
the Central Bank for candidates in the Board of Directors membership in the current term. On 11/06/1445 H (corresponding
to 24/12/2023 G), the Board of Directors resobed to appoint Mr. Saud Saleh Al-Arifi as Chairman of the Board of Directors
and Mr. Nayef Rashid Al-Arfaj as his deputy, given that the Company obtained a non-objection from the Insurance Authority
on 11/06/1445 H (Corresponding to 24/12/2023 G), as outlined in the below table:

Table No. (16): Composition of the Board of Directors

Indirect
Membership Status Direct Ownership
Ownership

Date of Appointment

Representation
Nationality

non-independent
Position

Independent /

non-executive

Name
Age

Ownership

Ownership
Percentage

Percentage
Executive /

Number of

Number of
Shares

Shares
Chairman 09/05/1445H
Saud Saleh Non-
1. of the Saudi 69 Independent (corresponding to Himself - - - -
Alarifi Executive
Board 23/11/2023G)
Vice
09/05/1445H
Naif Rashed Chairman Non-
2. Saudi 34 Independent (corresponding to Himself - - - -
Alarfaj of the Executive
23/11/2023G)
Board
Al Sagr
09/05/1445H
Sultan Abdulaziz Board Non- Non- National
3. Saudi 34 (corresponding to - - - -
Alsuwaidi Member Independent Executive Insurance
23/11/2023G)
Company
Yasser 09/05/1445H
Managing Non-
4. Mohammed Saudi 53 Executive (corresponding to Himself 1,000 0.0071429% - -
Director Independent
Alharbi 23/11/2023G)
Al Sagr
Abdel 09/05/1445H
Board Non- Non- National
5. Muhsen Nafez Canadian 51 (corresponding to - - - -
Member Independent Executive Insurance
Jaber 23/11/2023G)
Company
Abdullah 09/05/1445H
Board Non-
6. Sulaiman Saudi 44 Independent (corresponding to Himself - - - -
Member Executive
Alhendi 23/11/2023G)
Mohamed 09/05/1445H
Board Non-
7. Abdulaziz Saudi 72 Independent (corresponding to Himself 100 0.0007143% - -
Member Executive
Alnuaim 23/11/2023G)
09/05/1445H
Sami Ahmed Board Non-
8. Saudi 36 Independent (corresponding to Himself - - - -
Albabtin Member Executive
23/11/2023G)
09/05/1445H
Ahmed Khader Board Non-
9. Saudi 32 Independent (corresponding to Himself - - - -
Albaqshi Member Executive
23/11/2023G)
Source: The Company

43
4.3 Board Committees
Five (5) committees emerge from the Board of Directors, which are: (1) Audit Committee, (2) Nominations and Remuneration Committee, (3)
Executive Committee, (4) Investment Committee and (5) Risk Committee. These committees support the Board of Directors in performing its
duties.

4.3.1 Audit Committee

The Board of Directors, held on 05/06/1445H (corresponding to 18/12/2023G), appointed the Chairman and members of the Audit Committee,
which consists of three (3) members for a period of three (3) years starting from 09/05/1445H (corresponding to 23/11/2023G) and ending on
the end date of the current term of the Board on 12/06/1448H (corresponding to 22/11/2026G), after obtaining the approval of the Insurance
Authority on 05/05/1445H (corresponding to 17/12/2023G), as outlined in the below table:

Table No. (17): Members of the Audit Committee

Name Position Membership Status

Sami Ahmed Al Babtin Chairman of the Committee Independent – Board member

Moaz Suleiman Al-Zaid Committee Member Independent – not a Board member

Muhammad Ahmed Al Khamis Committee Member Independent – not a Board member

Source: The Company

y Duties, powers and competencies of the Audit Committee

According to the Company’s Audit Committee work regulations, the duties and powers of the Audit Committee are as follows:

- Developing a work plan approved by a decision of the Board of Directors, including the rules, responsibilities and obligations
of the Audit Committee.
- Supervising the Company’s internal audit department to ensure its level of effectiveness in carrying out the duties assigned
to it.
- Supervising the Company’s compliance department to ensure its level of effectiveness in implementing the duties assigned
to it.
- Appointing or dismissing the Director of the Compliance Department after obtaining a written non-objection from the Central
Bank.
- Appointing or dismissing the Director of the Internal Audit Department after obtaining a written non-objection from the
Central Bank.
- Determine the monthly salary and incentive bonuses for the Director of the Internal Audit Department and the Director of the
Compliance Department in accordance with the company’s internal regulations approved by the Board.
- Ensuring the independence of the Internal Audit Department and the Compliance Department in performing the duties
assigned to them and ensuring that there is no negative impact on their work.
- Ensuring the independence of the company’s board members, senior management, and external auditors from the company.
- Studying and review the annual financial statements and submit recommendations to the Board of Directors regarding them.
- Discussing proposals regarding the company’s annual regulatory compliance plan and approving it.
- Studying the plan of the internal audit department and the external auditors, in addition to the compliance plans, approve
them, and follow up on their implementation.
- Studying important accounting strategies, their procedures, and the changes that occur to them and submitting recommendations
to the Board of Directors regarding them.
- Studying internal audit reports and follow up on the mechanism for implementing corrective actions.
- Studying compliance management reports and submit recommendations thereon to the Board of Directors.
- Following up on reports issued by the institution and the relevant supervisory and oversight bodies and submit recommendations
thereon to the Board of Directors.
- Making recommendations to the Board of Directors regarding of the appointment or reappointment of internal or external
auditors.
- Approving contracts with the Company’s internal and/or external auditors, and obtaining written approval from the Central
Bank.
- Studying the reports of internal or external auditors and submit recommendations thereon to the Board of Directors.
- Evaluating the efficiency and effectiveness of the work of internal or external auditors.

44
 - Studying the observations of the Central Bank and the supervisory and regulatory authorities related to any regulatory
violations or requesting corrective measures, directing the Company’s internal departments to implement them, and
submitting recommendations regarding them to the Board of Directors.
- Ensuring that the Company’s complies with proposed actuarial expert, and submitting recommendations thereon to the Board
of Directors.
- Ensuring the optimal use of information technology and providing the necessary controls to obtain accurate and reliable
information and data.
- Reviewing the surplus distribution processes on a semi-annual basis and submitting reports to the Company’s Board of
Directors in the event of any observations.
- Discussing preliminary quarterly financial statements with the external auditors and the Company’s senior management
before issuing them.
- Study and review the preliminary initial quarterly financial statements and recommend them to the Board of Directors.
- Studying the internal and external auditors’ evaluation of internal control procedures.
- Studying operations among group entities and operations with related parties.
- Studying the actuarial expert’s reports and submit recommendations thereon to the Board of Directors.
- Ensuring the Company’s commitment to implementing the actuary’s suggestions and recommendations.
- Ensure the availability of a written regulation of the rules of professional conduct after its approval by the Company’s Board
of Directors to ensure that the Company’s activities are carried out in a fair and ethical manner.
- Follow up on important lawsuits filed by or against the Company and submit periodic reports regarding them to the Board
of Directors.
- Periodically reviewing the financial dues for insurance premiums related to the insurance policies of related parties and
potential default cases and submitting a report to the Company’s Board of Directors if the need arises.

4.3.2 Nomination and Remuneration Committee

The Board of Directors, held on 11/06/1445H (corresponding to 24/12/2023G), appointed the Chairman and members of the Nominations and
Remuneration Committee, which consists of four (4) members for a period of three (3) years starting from 09/05/1445H (corresponding to
23/11/2023G) and ending on the end date of the current term of the Board on 12/06/1448H (corresponding to 22/11/2026G), after obtaining the
approval of the Insurance Authority on 11/06/1445H (corresponding to 24/12/2023G), as outlined in the below table:

Table No. (18): Members of the Nomination and Remuneration Committee

Name Position Membership Status

Abdullah Suleiman Al Hendi Chairman of the Committee Independent – Board member

Ahmad Khader Albagshi Committee Member Independent – Board member

Mohamed Abdul Aziz Al Naim Committee Member Independent – Board member

Naif Rashed Alarfaj Committee Member Independent – Board member

Source: The Company

y Duties, powers and competencies of the Nomination and Remuneration Committee

The Company’s Nominations and Remuneration Committee’s work regulations specify its tasks and powers as follows:

- Develop clear policies for remuneration for the Board of Directors, members of senior management, and committees,
ensuring the use of standards performance related standards, and making them clear and available to all shareholders before
the General Assembly is held.
- Providing policies and procedures regarding corporate succession planning for the company, the Board of Directors, and
members of senior management and monitoring their implementation.
- Establishing clear procedures for nominating the Board, including approvals from the General Assembly and regulatory
authorities, provided that every shareholder has the right to nominate himself or others for membership in the Board of
Directors, as stipulated in the regulations.
- Developing plans to fill vacant leadership positions in the company, including members of executive management, and
following up on the implementation of plans and procedures for filling vacant positions.
- Providing recommendations regarding the nomination of members of the Board of Directors and determining their financial
compensation according to the requirements and policies approved by the company and compatible with the rules and
regulations issued by the regulatory authorities.
- Providing a training and orientation program for Board members that includes the company’s duties and achievements to
enable them to perform their work with the required efficiency and supervising it periodically.

45
 - Ensuring the independence of the independent members of the Board of Directors.
- The Nomination and Remuneration Committee must submit its plans regarding determining the shares of rewards and
compensation for the senior executive management and employees to the Audit Committee based on key performance
indicators, then approved by the Board of Directors and shareholders.
- Ensuring annually that there are no cases of conflict of interest among board members if one of them is a member of the board
of directors of another company
- Identifying the weaknesses and strengths of the Board of Directors and submitting proposals regarding addressing them in a
way that is consistent with the company’s interest in accordance with the standards and procedures for periodic and annual
evaluation of performance and suitability, and filling out all special forms for periodic and annual evaluation, as well as the
annual suitability form for the Board of Directors, subsidiary committees, and members of senior management.
- Reviewing of the necessary competencies annually and determining the required qualifications and skill needs appropriate
for membership in the Board of Directors.
- Reviewing the requirements required for membership in the Board of Directors and its committees and prepare a description
of the capabilities and qualifications required for membership in the Board of Directors or membership in Board committees,
including specifying the time that a member must devote to the work of the Board of Directors and/or Board committees.
- Reviewing plans to fill vacant positions for members of the Board of Directors and emerging committees.
- Reviewing the compensation and financial rewards of senior management members and submitting recommendations
thereon to the Board of Directors.
- Reviewing and approving aspects related to annual salaries, KPI-linked bonuses, sales commission and cash bonuses, and
long-term incentive plans.
- Submitting recommendations in the event of any change in the structure of the Board of Directors.
- Submitting a recommendation to the Board of Directors regarding the selection and dismissal of senior management members.
- Submitting performance reports of the Nominations and Remuneration Committee periodically to the Board of Directors.
- Develop job descriptions for executive, non-executive, independent, and senior executive members.
- Verifying on an annual basis the independence of members and the absence of conflicts of interest.

4.3.3 Risk Committee

The Board of Directors, held on 11/06/1445H (corresponding to 24/12/2023G), appointed the Chairman and members of the Risk Committee,
which consists of three (3) members for a period of three (3) years starting from 09/05/1445H (corresponding to 23/11/2023G) and ending on
the end date of the current term of the Board on 12/06/1448H (corresponding to 22/11/2026G), after obtaining the approval of the Insurance
Authority on 11/06/1445H (corresponding to 24/12/2023G), as outlined in the below table:

Table No. (19): Members of the Risk Committee

Name Position Membership Status

Naif Rashed Alarfaj Chairman of the Committee Independent – Board member

Sultan Abdulaziz Al Suwaidi Committee Member Non-executive – Board member

Saoud Saleh Al Arifi Committee Member Independent – Board member

Source: The Company

y Duties, powers and competencies of the Risk Committee

As per paragraphs (4.5) and (4.6) of the Company’s Risk Committee work regulations, the Committee’s main responsibilities are to assist the
Board of Directors in its supervisory responsibilities for risk management, including the following:

- Establishing a risk management framework for the Company.

- Determine the Company’s risk tolerance.
- Ensure the implementation of action plans and restrictions to reduce and manage risks.
- Ensure strict Board oversight of critical risk issue.
The main responsibilities of the Risk Committee include:

- Monitoring the performance and implementation of the company’s internal control systems, ensuring the effectiveness and
efficiency of those systems, and verifying the implementation of internal control decisions and procedures.
- Identify risks that may expose the company to risk and maintain an acceptable risk profile for the Company.
- Supervising the risk management system and evaluating its effectiveness.
- Defining a comprehensive risk management strategy for the company and supervising its implementation, reviewing and
updating it periodically, taking into account the Company’s internal and external developments.

46
 - Reviewing risk management policies.
- Regularly reassess the company’s risk tolerance and exposure (for example, through stress testing exercises).
- Submitting reports to the Board of Directors detailing risk exposure and recommending the necessary actions to manage
them.
- Ensure the availability of adequate resources and systems to manage risks.
- Verifying the independence of risk management employees from activities that may expose the company to risks.
- Evaluating the performance of the Head of Risk Management and the activities of the Risk Management Department.
- Reviewing and approving requests for information from management, company employees, or any other party regarding the
committee’s activities and decisions.
The committee also evaluates matters that fall within its jurisdiction or that are referred to it by the Board and submits its recommendations
to the Board to issue decisions regarding them. The Committee shall take decisions in this regard if authorized by the Board to do so. The
committee may seek the assistance of any experts or specialists, whether internally or externally, within the scope of its powers. This must be
included in the minutes of the committee meeting.

4.3.4 Executive Committee

The Board of Directors, held on 11/06/1445H (corresponding to 24/12/2023G), appointed the Chairman and members of the Executive
Committee, which consists of five (5) members for a period of three (3) years starting from the date of 09/05/1445H (corresponding to
23/11/2023G) and ending on the end date of the current term of the Board on 12/06/1448H (corresponding to 22/11/2026G), after obtaining the
approval of the Insurance Authority on 11/06/1445H (corresponding to 24/12/2023G), as outlined in the below table:

Table No. (20): Members of the Executive Committee

Name Position Membership Status

Saoud Saleh AlArifi Chairman of the Committee Independent – Board member

Abdul Mohsen Nafez Jaber Committee Member Non-executive – Board member

Sultan Abdulaziz Al Suwaidi Committee Member Non-executive – Board member

Yasser Mohamed Alharbi Committee Member Executive – Board member

Abdullah Suleiman Al Hindi Committee Member Independent – Board member

Source: The Company

y Duties, powers and competencies of the Executive Committee

As per Article (11) of the Company’s Executive Committee work regulations, committee’s members perform their duties and responsibilities,
exercise the necessary diligence to do so, and work in good faith for the Company’s success. The committee should also take into account the
following topics:

- Providing recommendations to the Board of Directors regarding the strategic and operational plans, budgets and business
plans developed by management.
- Making decisions on matters authorized by the Board that are outside the scope of the powers of the Company’s General
Manager, including matters related to capital expenditures and purchases within the limits authorized to the committee by
the Board of Directors.
- Reviewing the Company’s mechanisms, procedures and strategy in cooperation with executive management.
- Supervising the performance of the executive management and verifying its work in accordance with the company’s strategy,
policies and approved regulations.
- Reviewing and evaluating the performance of the executive management and its effectiveness and submitting the necessary
recommendations to the Board of Directors.
- Continuously analyze operational risks and work to reduce them
- Ensuring the implementation of the company’s internal control systems and controls.
- Arranging priorities in allocating capital, human and technical resources.
- Monitoring market shares, growth rates and penetration.
- Monitoring the implementation of the expansion of points of sale and branches.

47
4.3.5 Investment Committee
The Board of Directors, held on 11/06/1445H (corresponding to 24/12/2023G), appointed the Chairman and members of the Investment
Committee, which consists of four (4) members for a period of three (3) years starting from 09/05/1445H (corresponding to 23/ 11/2023G) and
ends on the end date of the current session of the Board on 12/06/1448H (corresponding to 22/11/2026G), after obtaining the approval of the
Insurance Authority on 011/06/1445H (corresponding to 24/12/2023G), as outlined in the below table:

Table No. (21): Members of the Investment Committee

Name Position Membership Status

Yasser Mohammed Alharbi Chairman of the Board Executive - Board member

Abdul Mohsen Nafez Jaber Committee Member Non-executive - Board member

Mohammed Abdul Aziz Al Naim Committee Member Independent - Board member

Ahmad Kheder Al Yakshi Committee Member Independent - Board member

Source: The Company

y Duties, powers and competencies of the Investment Committee

As per Article (11) of the Company’s Investment Committee work regulations, the members of the committee shall perform their duties and
responsibilities, exercise the necessary diligence to do so, and work in good faith for the success of the Company. The committee should also
take into account the following topics:

- Formulating and preparing the investment policy and reviewing its performance and implementation on an annual basis.
- Review the performance of each asset category.
- Follow up on the general risks of the investment policy.
- Submitting the investment portfolio performance report to the Board of Directors.
- Ensure that all investment-related activities comply with the requirements of the investment regulations issued by the Saudi
Central Bank and the requirements of other relevant laws and regulations.

4.4 Executive Management

In accordance with the articles of association, Company’s policies and relevant Board of Directors decisions, the Executive Management of
the Company is entrusted to the Managing Director. As of the date of preparing this prospectus, the position of Managing Director is held by
Mr. Yasser Mohammed Al-Harbi, and the position of Chief Financial Officer is held by Mr. Masoud Ahmed Bhatti. The below table outlines
the executive management members:

Table No. (22): Members of the Executive Management

Ownership

Name Position Nationality Age Direct Ownership Indirect Ownership

Number of Ownership Number of Ownership

Shares Percentage Shares Percentage

Yasser Mohammed Alharbi Managing Director Saudi 53 1,000 0.00714% 0 0

Finance Director
Masood Ahmed Bhatti Pakistani 42 0 0 0 0
(Assignment)
Head of Technical
Dalal Abdullah Al-Burhan Saudi 39 0 0 0 0
Administration

Terky Nasser Al Maouh Head of compliance Saudi 49 0 0 0 0

Head of the Internal Audit

Imad Mahdi Awani Saudi 39 6 0.00004286% 0 0
Department
Director of Medical
Kazem Ahmed Al Kazem Saudi 48 0 0 0 0
Administration
Ahmed Abdul Rahman Head of commercial
Saudi 42 0 0 0 0
Al-Mutaliq activity

Noura Al-Assoum Risk Manager (Assigned) Saudi 34 0 0 0 0

Ahmed Al-Ghanim Reinsurance Manager Saudi 37 0 0 0 0

48
 Ownership

Name Position Nationality Age Direct Ownership Indirect Ownership

Number of Ownership Number of Ownership

Shares Percentage Shares Percentage

Senior Underwriting
Ahmed Al-Mousa Saudi 38 0 0 0 0
Manager, General Insurance
Tariq Abdulaziz Al- Director of Legal
Saudi 43 0 0 0 0
Mashouq Department
Director of Information
Ali Abbas Ramadan Saudi 46 0 0 0 0
Technology Department
Yasmine Muhammad
Customer Care Manager Saudi 28 0 0 0 0
Al-Zahrani

Firas Ali Al Daoud Vehicle Claims Manager Saudi 51 0 0 0 0

Director of Actuarial
Ritika Jain Indian 44 0 0 0 0
Department
Source: The Company

4.5 Compensation and Remuneration of Board members and Senior Executives

Rewards are distributed to the Board members in accordance with the provision of Article (19) of the Company’s Bylaws, where the annual
remuneration for the Chairman and Board members consists of a minimum of four hundred thousand (400,000) Saudi Riyals and a maximum
of five hundred thousand (500,000) Saudi Riyals annually in exchange for their membership in the Board of Directors and their participation
in its work, including additional remuneration in the event that the member participates in any of the committees emanating from the Board of
Directors. If the Company realizes profits, a percentage equivalent to (10%) of the net profit may be distributed after deducting the reserves
decided by the General Assembly in application of the provisions of the Cooperative Insurance Companies Control Law and after distributing
profits to shareholders of no less than (5%) of the Company’s paid-up capital provided that the entitlement to these rewards is proportional
to the number of sessions attended by the member, and any estimation contrary to this will be deemed invalid. In all cases, the total amount
received by a Board member in terms of financial or in-kind rewards and benefits does not exceed the amount of five hundred thousand
(500,000) Saudi Riyals annually. The maximum allowance for the Board’s sessions and its committees shall be five thousand (5,000) Saudi
Riyals for each session, not including travel and accommodation expenses.

- The below table outlines the value of compensation and bonuses received by senior Board executive members during the
years 2020G, 2021G and 2022G:

Table No. (23): Compensation and Remuneration of Board members and Senior Executives

Distributions 2020G 2021G 2022G

Board Members 3,816,667 3,931,111 3,323,889

Senior Executives 5,321,428 4,919,434 4,331,133

Total 9,138,095 8,850,545 7,655,022

Source: The Company

4.6 Employees

4.6.1 Employee share schemes in place prior to the application for registration and offer of
securities that are subject to this Prospectus
The Company currently does not have any stock allocation program for its employees.

4.6.2 Arrangements that involve employees in the Company’s capital

There are no arrangements involving employees in the Company’s capital as of the date of this prospectus.

49
5. Financial Information and Management Discussion and
Analysis

5.1 Introduction
The Financial Information and Management Discussion and Analysis section includes an analytical review of the Company’s performance and
financial position during the financial years ended December 31, 2020G, 2021G and 2022G and the nine-month period ending on September
30, 2023G. It is based and should be read in conjunction with the audited financial statements for the fiscal years ending on December
31, 2020G, 2021G and 2022G and the unaudited interim condensed for the nine-month period ending on September 30, 2023G and the
accompanying notes (hereinafter referred to as to the “Financial Statements”).

The financial statements for the fiscal years ending on December 31, 2020G were audited by Price Waterhouse Coopers Chartered
Accountants LLP and PKF Al Bassam and Partners. While the financial statements ending on December 31, 2021G and 2022G respectively,
and the interim condensed financial statements for the nine-month period ending on September 30, 2023G, they were audited by Al Kharashi &
Co. Certified Accountants and Auditors, and Price Waterhouse Coopers Chartered Accountants LLP. Al Kharashi & Co. Certified Accountants
and Auditors, and Price Waterhouse Coopers Chartered Accountants LLP confirm their independence of the Company in the auditor’s report.
The Company issues its financial statements in Saudi Riyals. The Company’s audited financial statements for the fiscal years ending on
December 31, 2020G, 2021G, and 2022G, and the unaudited financial statements for the nine-month period ending on September 30, 2023G,
were prepared in accordance with the International Financial Reporting Standards (IFRS) approved in the KSA and other issuances approved
by the Saudi Organization for Auditors and Accountants (SOCPA). Based on the instructions issued by the Central Bank on 20/11/1440H
(corresponding to 23/07/2019G), which states the update of accounting policies for accounting treatment of Zakat and Income Tax in the
income statement, the Company has retroactively amended the effect in line with international financial reporting standards.

The financial information contained in this Section is extracted without material changes from the audited financial statements for the fiscal
years ending on December 31, 2020G, 2021G and 2022G, and the unaudited interim condensed financial statements ending on September 30,
2023G and the notes attached thereto. The figures for the fiscal year ending on December 31, 2020G have been used as they are classified in the
financial statements ending on December 31, 2021G, and the comparative figures for the nine-month period ending on September 30, 2022G
were extracted from the unaudited financial statements for the nine-month period ending on September 30, 2023G.

This section prepared by the Company’s management contains forward-looking statements that involve risks and uncertain expectations. The
Company’s actual performance may differ materially from what is stated in these forward-looking statements as a result of various factors,
including those discussed below and in other topics of this prospectus.

Please note that the numbers in this section have been rounded to the nearest integer. Therefore, the sum of these numbers may differ from what
is shown in the tables. It should also be noted that all percentages and margins are based on these rounded numbers.

5.2 Directors’ Declarations for Financial Statements

The Directors declare, to the best of their knowledge and belief, that:

- The financial information presented in this Prospectus is extracted without material change from the audited financial
statements Independent and non-consolidated for the financial years ending on December 31, 2020G, 2021G, and 2022G as
well as the unaudited interim condensed financial statements for the nine-month period ending on September 30, 2023G and
the notes attached thereto in accordance with the International Financial Reporting Standards (IFRS) that are endorsed in
the Kingdom of Saudi Arabia and other standards and pronouncements issued by the Saudi Organization for Certified Public
Accountants (SOCPA) without any fundamental modification.
- There was no interruption in the Company’s business that could have, or would have significantly affected, its financial
position during the last 12 months from the date of this Prospectus.
- The Company did not grant any commissions, discounts, or brokerage fees, or other non-monetary compensation to any
existing or suggested member of the Board of Directors, Senior Executives, or experts, executive or existing in connection
with the issuance or offering of any securities during the three years immediately preceding the date of submitting the
application for registration and offering of securities subject to this Prospectus.
- There was no negative material change in the financial and commercial position of the Company during the three years
immediately preceding the date of submitting the registration application and offering of securities subject to this Prospectus,
in addition to the end of the period covered by the certified public accountant’s report until the approval of this Prospectus.

50
 - The Company does not have any loans or other indebtedness, including overdrafts from bank accounts, and that there are
no security obligations (including personal guarantees, those not secured by personal guarantee, secured or not secured by a
mortgage), or obligations under acceptance, acceptance credit, or hire purchase obligations.
- The Directors acknowledge that the Company does not have any issued or outstanding debt instruments, approved but not
issued, or term loans (including loans secured by a personal guarantee, secured by mortgage or not secured by mortgage).
- The members of the Board of Directors acknowledge that - to the best of their knowledge - there are no mortgages, rights, or
any encumbrances or costs on the company’s property as of the date of this prospectus.
- The members of the Board of Directors acknowledge that the Company does not own any property, including contractual
securities or other assets, whose value is subject to fluctuations or whose value is difficult to ascertain, which could
significantly affect the assessment of the financial position.
- With the exception of what was mentioned in paragraph (4.2) “Board of Directors” of Section (4) “Organizational and
Administrative structure” of this prospectus, neither the members of the Board of Directors nor any of their relatives have
any shares or interest of any kind in the company.
- The members of the Board of Directors confirm that the Company has sufficient working capital for at least 12 months
immediately following the date of publication of this prospectus.
- The Board of Directors announces that there is no capital of the company included in the option right.
- All material facts related to the Company and its financial performance have been disclosed in this Prospectus, and that there
are no other facts that would make any statement misleading if overlooked.
- The members of the Board of Directors confirm that, with the exception of what is stated in Paragraph (5.11) “Capital
Obligations and Other Contingent Liabilities,” the Company does not have any potential obligations or guarantees.
- Other than what was mentioned in Section (2) “Risk Factors” of this prospectus, the Company is not aware of any seasonal
factors or economic cycles related to its activity that may have an impact on the Company’s business or financial conditions.
- Other than what is stated in Section (2) “Risk Factors” of this Prospectus, the Company is not aware of any governmental,
economic, financial, monetary, political policies or any other factors that have affected or are likely to materially affect
(directly or indirectly) Company operations.
- The Directors acknowledge that the Company does not currently have any issued or outstanding debt instruments, approved
but not issued, or term loans, including any loans covered by a personal guarantee, secured by mortgage or not secured by
mortgage.

5.3 Significant Accounting Policies

The accounting policies, estimates and assumptions used in the preparation of these financial statements are consistent with those used in the
preparation of all the annual financial statements hereby presented.

5.3.1 New and Amended Standards Applied by the Company

A number of narrow amendments to IFRS 3, IAS 16 and IAS 37 and some annual improvements to IFRS 1, IFRS 9, IAS 41 and IFRS 16
(effective from January 1, 2022G).

- Amendments to IFRS 3 “Consolidation Business” and updates to the reference in IFRS 3 to the Financial Reporting
Conceptual Framework without changing the accounting requirements for business combinations.
- Amendments to IAS 16 “Property, Plant and Equipment (PPE)” which prevents the Company from deducting amounts
received from the sale of production items from the cost of PPE when it prepares the asset for its intended use. Instead, the
Company recognizes these sales revenues and associated costs in the income statement.
- Amendments to IAS 37 “Provisions, Contingent Liabilities and Contingent Assets” set out the costs that the Company
includes when assessing whether a contract will be loss-making.
- The Annual Improvements introduce minor amendments to IFRS 1 “First-time Application of IFRS”, IFRS 9 “Financial
Instruments”, IAS 41 “Agriculture”, and illustrative examples attached to IFRS 16 “Leases”. “.
The Company has not identified any material impact as a result of these amendments.

y Amendment to IFRS 16 Leases – Covid-19 Lease Concessions

As a result of the Covid-19 pandemic, rent/lease concessions have been granted to tenants. These concessions may take many forms, including
the payment waivers and deferral of rent payments. In May 2020G, the IASB published IFRS 16 which provides an optional practical means for
lessees to assess whether a COVID-19 related lease concession is a lease amendment. On March 31, 2021G, the IASB published an additional
amendment to extend the expedient date from June 30, 2021G to June 30, 2022G. Tenants can choose to account for these lease concessions in
the same manner as if they were not amendments to the lease. In many cases, this results in concessions being accounted for as variable lease
payments in the period(s) in which the event or circumstance that led to the reduced payments occurs. The Company has not identified any
impact as a result of these amendments.

51
y IFRS Interpretation Committee Agenda Decision - Lessor Exemption from Lease Payments (IFRS 9 and IFRS 16)
In October 2022G, the IASB finalized an agenda decision approved by the IFRIC on “Lessor Exemption from Lease Payments (IFRS 9 and
IFRS 16)”. The agenda resolution addresses accounting from the lessor’s perspective, and in particular:

- How should the expected credit loss model in IFRS 9 be applied to an operating lease receivable when the lessor expects to
forgive payments due from the lessee under the lease before granting the lease concession.
- Whether to apply the derecognition requirements in IFRS 9 or the lease modification requirements in IFRS 16 when
accounting for a lease concession.
The Company has not identified any impact as a result of these amendments.

5.3.2 New Standards, Amendments and Interpretations that the Company Has Not Yet
Implemented
The Company has decided not to apply the following new standards, interpretations and amendments that have been recently issued very early
to the existing standards. However, they are not yet in effect, and the Company is currently evaluating their impact.

Critical Judgments and Accounting Policy Options/Choices

The Company is expected to apply the following significant accounting policies in preparing the financial statements on the effective date of
IFRS 17, i.e., January 1, 2023G:

a. Contracts Within/Outside the Scope of IFRS 17

- IFRS 17, Insurance Contracts, defines those contracts under which an entity accepts significant insurance risk from another party (the
policyholder), by agreeing to indemnify the policyholder if a specified uncertain future event (the insured event) adversely affects its
Policy holder.
- In the ordinary course of business, the Company uses reinsurance to mitigate its risk exposure. A reinsurance contract transfers
significant risk if it transfers substantially all of the insurance risk arising from the insured portion of the underlying insurance
contracts, even if it does not expose the reinsurer to the possibility of a material loss.

b. Aggregation/Separation of Contracts
The Company does not underwrite any insurance contracts that contain embedded derivatives or distinct investment components. Currently, the
Company’s insurance portfolios do not contain any non-insurance components that must be separated from insurance contracts.

c. Aggregation Level
The Company determines insurance contract portfolios. Each portfolio consists of contracts subject to similar risks and managed together, and
is divided into three groups:

- Any contracts that are ineffective upon initial recognition;

- Any contracts that, upon initial recognition, have little potential to subsequently become useless; And
- Any remaining contracts in the wallet.
Portfolios of reinsurance contracts held for pooling are evaluated separately from the issued portfolios of insurance contracts. By applying
aggregation requirements to proprietary reinsurance contracts, the Company arranges its reinsurance contracts into the following groups:

1. Contracts that have a net profit on initial recognition, if any;

2. Contracts that do not have, upon initial recognition, significant potential for subsequent net profit; And
3. Remaining contracts in the portfolio, if any.

d. Measurement - Overview
IFRS 17 provides the following different measurement models:

1. The General Measurement Model (GMM - also referred to as the building block approach or BBA), consists of fulfillment cash flow
and contractual service margin. There is no set of contracts expected to be measured under the general measurement model.
2. Variable Fee Approach (VFA):

It is a mandatory model for measuring contracts with direct participation features (also referred to as “Direct Participation Contracts”). This
assessment of whether a contract meets these criteria is made at the inception of the contract and is not subsequently re-evaluated.

The variable fee approach is not applicable in the case of the Company because it does not have any contracts with direct participation features.

52
 3. Premium Allocation Approach (PAA)

A premium allocation approach is permitted to measure liability for residual coverage if it provides a measure that is not materially
different from the general measurement model or if the coverage period for each contract in the group is one year or less.

The Company may simplify the measurement of a pool of insurance contracts using a premium allocation model if, and only if, at the
beginning of the pool:

- The entity reasonably expects that this simplification will result in a measurement of the group’s remaining coverage liability that
will not be materially different from what would be produced by applying the general requirements; or
- The coverage period for each contract in the group (including insurance contract services arising from all premiums within the
contract limits specified at that date) is one year or less.
The Company expects to use premium allocation to simplify the measurement of contract groups on the following grounds:

y Insurance Contracts
The coverage period for medical and vehicle/motor contracts in the contract group is one year or less. Eligibility test has been conducted to
allocate premiums to the group of contracts for accidents, engineering, general casualty, marine, fire and property contracts. The Company
reasonably expects that the resulting measurement will not differ materially from the result of applying the general measurement model.

y Reinsurance Contracts
The Company reasonably expects that the resulting measurement under a premium allocation model measurement will not materially differ
from the result of applying the general measurement model.

Measurement
At initial recognition for each group of contracts, the carrying amount of the liability for remaining coverage is measured at the premiums
received at initial recognition less cash flow paid to acquire the insurance.

Subsequently, the carrying amount of the liability for remaining coverage is increased by any premiums received and decreased by the amount
recognized as insurance revenue for coverage provided. Upon initial recognition of each group of contracts, the Company expects the time
between the provision of each portion of coverage and the premium due date to be no more than one year. Accordingly, the Company expects
that the liability will not be adjusted for the remaining coverage to reflect the time value of money and the impact of financial risks.

The Company will recognize a liability for claims incurred for a group of insurance contracts in the amount of cash flow to satisfy the claims
incurred and adjust risks for non-financial risks. It includes the estimated total cost of claims incurred but not settled and claims incurred but
not reported at the date of the statement of financial position plus the costs of processing the related claims, whether reported by the insured
or not. Cash flow will be discounted (at current rates) unless expected to be paid within one year or less from the date of the claims incurred.

Evaluation of a Futile Contract

If at any time during the coverage period, facts and circumstances indicate that a combination of contracts is ineffective, the Company will
recognize a loss in insurance services expense and increase the remaining coverage liability to the extent that current estimates of earned cash
flow, determined under the general measurement model and relating to the remaining coverage (including risk adjustment for non-financial
risks) exceeds the carrying amount of the liability for the remaining coverage. A loss component will be created for the amount of loss
recognized. The loss component will then be remeasured at each reporting date as the difference between the amounts of fulfillment cash flow
determined under the general measurement model related to future service, and the carrying amount of the liability for the remaining coverage
without the loss component.

a. Significant Judgments and Estimates

1. Discount Methodology:
Discount rates are primarily used to adjust estimates of future cash flow to reflect the time value of money and other financial risks to
accrue interest on the liability for claims incurred.

The bottom-up discount rates model will be used to derive the discount rate. Under this model, risk-free discount rates based on the US
Dollar will be used by the European Insurance and Occupational Pensions Authority (EIOPA) as the starting point for preparing the yield
curve. The Company will then add the premium risk to make the yield curve suitable for the application. The Company will use the US
Dollar volatility adjustment reported by the EIOPA for Solvency II as a proxy for the illiquidity premium.

The Company expects to deduct liabilities related to claims incurred for all groups of insurance contracts.

2. Risk Adjustments for Non-financial Risks:

The Company must adjust the estimate of the present value of future cash flow to reflect the compensation required by the entity to bear
the uncertainty about the amount and timing of cash flow that arise from non-financial risks. Therefore, the purpose of risk adjustment for

53
 non-financial risks is to measure the effect of uncertainty in cash flow arising from insurance contracts, as opposed to uncertainty arising
from financial risks.

The risks covered by the risk adjustment for non-financial risks are insurance risk and other non-financial risks such as interruption and
expense risks.

The Company will not take into account the effect of reinsurance in risk adjustment for non-financial risks of the underlying insurance
contracts.

The Company will adopt a simplified premium allocation model to calculate liability for remaining coverage. Hence, a liability risk
adjustment for the remaining coverage will only be estimated if a group of contracts is recognized as loss-making.

There is no specific model for determining risk adjustment for non-financial risks for each group of insurance contracts. By applying the
Confidence Level technique, the Company will estimate the probability distribution of the expected present value of future cash flow
from insurance contracts at each reporting date and will calculate the risk adjustment for non-financial risks as an increase of the Value at
Risk (VaR) of 75% (target confidence level) over the expected present value of future cash flow.

The Company will use the Mack-Method to calculate the risk adjustment ratio using 75% for vehicle/motor portfolios and medical
portfolios. For other portfolios and due to insufficient data, the Company will rely on the expert judgment of the designated actuary and
use the suggested risk adjustment percentage.

3. Identifying Ineffective Contracts:

Under the premium allocation model, the Company does not assume any contracts in the portfolio are ineffective at initial recognition
unless the “facts and circumstances” indicate otherwise. The Company will evaluate non-viable contracts on an annual and underwriting
basis, in conjunction with updated information on product profitability. Furthermore, the evaluation should be repeated if the “facts and
circumstances” indicate that there are significant changes in product pricing and design, plans, and forecasts.

The Company will establish a process to identify futile, potentially futile, and profitable contracts by evaluating the profitability of various
portfolios at the beginning of the underwriting year. The profitability of each portfolio must be evaluated individually.

b. Accounting Policy Options

1. Duration of Contracts
In accordance with IFRS 17 regulatory requirements, entities may not include contracts issued for more than one year in the same group
in relation to the aggregation of annual/semi-annual/quarterly/monthly new business packages. The Company decided that the length of
contracts would be on an annual basis.

2. Display Insurance Financing Income or Expenses

By referring to the presentation in the income statement, the Company expects to present the entire insurance financing income or expense
for the period in the income statement.

3. Reducing the Risk-Adjusted Discount Rate

Referring to the presentation in the income statement - in relation to the risk-adjusted discount rate, the Company expects that risk
adjustment would be fully reflected in the insurance service results.

4. Classification of Expenses
The Company will conduct regular expense studies to determine the extent to which fixed and variable overhead expenses can be directly
attributed to fulfilling insurance contracts.

5. Postponing Purchase Costs

Referring to the recognition of acquisition costs, the Company expects to amortize the acquisition cost over the term of the contract rather
than immediately recognizing it as an expense.

6. Presentation and Disclosure

The Offer:

The following are the Company’s expected policy guidelines related to the financial statements and disclosure preparation process:

Income Statement:

The Company must divide the amounts recognized in the income statement into insurance revenues, insurance servicing expenses, and
insurance financing income or expenses. A mandatory subtotal called insurance service result will include insurance revenues, insurance
service expenses, and results from reinsurance contracts for which there is an option in the standard to present reinsurance holidays and
recoveries separately or net as a single line item. Depending on its management’s evaluation, the Company will choose to present them

54
 separately. Furthermore, insurance financing income and expenses relating to insurance contracts issued and reinsurance contracts held
should also be presented separately.

y Insurance Revenue
For the premium allocation model, insurance revenue for the period refers to the amount of expected premium receipts allocated to
the period, excluding any investment component. The allocation of insurance revenue for the period will be made under the premium
allocation model based on the passage of time.

y Insurance Service Expenses

The Company’s insurance service expenses will include the following items:

a. Claims incurred and other insurance service expenses incurred;

b. Amortization of insurance acquisition cash flow;
c. Changes relating to prior service, i.e., changes in fulfillment cash flow relating to liability for incurred claims incurred; And
d. Changes related to future service, such as losses resulting from onerous contract packages and the reversal of such losses.

Changes related to prior service indicate changes in fulfillment cash flow (FCF) related to liability for incurred claims. Any development
in incurred claims, including changes in expected cash flow as well as risk adjustment, will be reflected in the insurance service expenses.

y Insurance Finance Income and Expenses

For presentation purposes, the Company expects to include all insurance finance income for expenses during the period in profit or loss.
In addition, the Company will be required to present insurance finance income and expenses relating to insurance contracts issued and
reinsurance contracts held in the income statement.

Statement of Financial Position:

The Company will present the following components/items separately in the statement of financial position as required by IFRS 17:

- Insurance contracts that are assets.

- Insurance contracts that are liabilities.
- Reinsurance contracts held which are assets; and
- Reinsurance contracts held as liabilities.

y Disclosures
IFRS 17 requires extensive new disclosures about amounts recognized in the financial statements, including detailed contract settlements,
the effects of newly recognized contracts, as well as disclosures about significant judgments made in applying IFRS 17. There will also
be extended disclosures about nature and extent. Among the risks of insurance and reinsurance contracts, disclosure will generally be
made at a more accurate level than IFRS 4, providing more transparent information for assessing the effects of contracts on financial
statements. Since all of the Company’s products are expected to be eligible under the Premium Allocation Approach, the following are the
key disclosures required under IFRS 17 and the Premium Allocation Approach Law:

1. Reconciling changes in liability for remaining coverage, liability for claims incurred, risk adjustment and loss components;
2. Risk framework; and
3. Sensitivity analysis.
4. Transition

On the date of initial application, January 1, 2023G, IFRS 17 must be applied retrospectively. Where a full retrospective approach is impractical,
IFRS 17 allows alternative transition methods.

The Company has determined that reasonable and supportable information is available for all contracts in effect on the date of transition. In
addition, since the contracts are eligible for the premium allocation approach, the Company has concluded that only current and prospective
information will be required to reflect the circumstances at transition date, which will make full retrospective application practicable and,
therefore, the only option available for insurance contracts issued by Company.

Accordingly, the Company will:

- Identify, recognize and measure each group of insurance contracts and any insurance acquisition cash flow assets as if IFRS 17 had
always applied;
- Derecognize any existing balances that would not have existed if IFRS 17 had always been applied; and
- Recognize any resulting difference in opening net equity.

55
Transition Effect
The Company estimates that upon application of IFRS 17, the effect (before Zakat) will be a decrease in the Company’s total equity of SAR
(46.8 million) as of January 1, 2022G. The impact on total equity as of January 1, 2023G is currently estimated and must be disclosed in the
interim condensed financial statements for the period ending on March 31, 2023G.

SAR
January 1, 2022G

Estimated Increase (Decrease) in the Company’s Total Equity

Change in the Measurement of Reinsurance Contracts Assets 9,999,472

Change in the Measurement of Insurance Contracts Liabilities (56,760,318)

Estimated Impact of Applying IFRS 17 before Zakat (46,760,846)

January 1, 2022G

Estimated Increase (Decrease) in the Company’s Total Assets

Risk Adjustment 10,077,260

Discount 165,715

Decrease in the Value of Reinsurers Balances (243,503)

Estimated Impact of Applying IFRS 17 on Total Assets 9,999,472

January 1, 2022G

Estimated Increase (Decrease) in the Company’s Total Liabilities

Loss Component (40,646,364)

Risk Adjustment (16,375,595)

Discount 1,090,628

Decrease in the Value of Insurance Premiums Receivable (828,987)

Estimated Impact of Applying IFRS 17 Before Zakat (56,760,318)

y IFRS 9 – Financial Instruments

IFRS 9 “Financial Instruments” is the IASB’s replacement of IAS 39 “Financial Instruments: Recognition and Measurement” and is effective
for annual periods beginning on or after January 1, 2018G. The Company has met the relevant criteria and applied the temporary exemption
from IFRS 9 for annual periods prior to January 1, 2023G, it will therefore apply IFRS 9 for the first time on January 1, 2023G.

1. Financial Assets - Classification & Measurement

IFRS 9 classifies financial assets into three categories: amortized cost, fair value through other comprehensive income (FVOCI), and
fair value through profit or loss (FVTPL). Each category has different accounting treatment.

The Company conducted a preliminary assessment of IFRS 9 - Classification and Measurement of Financial Assets held as of
December 31, 2021G. As previously mentioned, IFRS 9 includes three main classification categories for financial assets measured
at: amortized cost, fair value through other comprehensive income (“Other Comprehensive Income (OCI)”) and fair value through
profit or loss (“Other Comprehensive Income (OCI)”). This classification is generally based, with the exception of equity instruments
and derivatives, on the business model in which the financial asset and its contractual cash flow are managed. With the exception
of financial assets that are designated upon initial recognition at fair value through profit or loss and for investments in equity
instruments, a financial asset is classified on the basis of:

a. The Company’s business model for managing the financial asset; And
b. Contractual cash flow characteristics of the financial asset.

The Company’s classification and measurement review process consists of two parts:

- Business Model Evaluation: On the basis of fact patterns discussed and agreed with management; And
- Characteristics of Contractual Cash Flow Evaluation: Based on a comprehensive review of a sample of contracts specifically
selected to provide a provisional conclusion as to whether the contractual terms of an asset give rise to cash flow that are Solely
Payments of Principal and Interest (SPPI) on the principal amount outstanding (“Assessment of Payments of Principal and Interest”).

56
 2. Financial Assets - Decline in the Value of Financial Assets

Under IFRS 9, the Expected Credit Loss (ECL) allowance is based on credit losses expected to arise over the life of the asset (Lifetime
Expected Credit Loss), unless there has been a significant increase in credit risk from the beginning, in which case the allowance is
based on 12-month expected credit loss.

Lifetime ECLs represent the expected credit losses that would result from all possible default events over the expected life of a
financial asset. While 12-month ECLs are the lifetime losses expected to occur within 12 months of the balance sheet date. Both
lifetime ECLs and 12-month ECLs will be calculated on an individual basis depending on the nature of the underlying portfolio of
financial instruments.

Expected credit losses are calculated based on the probability of default, loss at default, and exposure at default. Expected credit losses
are discounted to the current value.

Probability of Default (PD)

Probability of default is an estimate of the probability of default over a given period of time.

Loss Given Default (LGD)

Loss Given Default (LGD) is determined by financial instrument class based on historical experience of loss and recovery rates for similar
financial instruments and other relevant industry data.

Exposure at Default (EAD)

Exposure at Default (EAD) is an estimate of the exposure at the date of a future loss. The default occurs at an unknown future date.

Forward-looking Assessments
While estimating expected credit losses, the Group will review the macroeconomic developments occurring in the economy and market
in which it operates. On a periodic basis, the Company will analyze the relationship between major economic trends while estimating the
probability of default.

IFRS 9 applies to financial instruments that are not measured at fair value through profit or loss. Equity instruments measured at Fair Value
through Other Comprehensive Income (FVOCI) are also excluded from the scope of impairment.

Financial assets exposed to impairment consist of the investment portfolio (debt and equity instruments), time deposits, statutory deposits and
cash and cash equivalents.

3. Financial Liabilities

IFRS 9 largely retains the requirements of IAS 39 for the classification and measurement of financial liabilities. However, under IAS
39, all fair value changes to financial liabilities classified at Fair Value Through Profit or Loss (FVTPL) are recognized in the income
statement, while under IFRS 9, such changes in fair value would generally be presented as follows:

- The amount of change in fair value that is attributable to changes in the credit risk of the liability will be presented in Other
Comprehensive Income (OCI).
- The remaining amount of the change in fair value is presented in the income statement.
There is no expected impact on financial liabilities as a result of the transition to IFRS 9.

4. Transition

Estimated Change in the Company’s Total Equity Due to the Initial Application of IFRS 9

The Company estimates that when applying the IFRS 9, the effect (before Zakat) is an increase amounting to SAR (6.9 million) in
its total equity as of January 1, 2022G. Reclassification of certain financial assets will result in the related fair value reserve being
transferred to accumulated losses that have no impact on total equity. The transfer as of January 1, 2022G is expected to be a reduction
in accumulated losses and fair value reserve of SAR (6.9 million).

The impact on total equity as of January 1, 2023G is currently being estimated and was disclosed in the interim condensed financial
statements for the period ending on March 31, 2023G.

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 SAR
January 1, 2022G

Estimated Increase (Decrease) in the Company’s Total Equity

Decrease in the Value of Financial Assets (18,410)

Estimated Impact of Applying IFRS 9 Before Zakat (18,410)

The above rating is a time estimate and not a forecast. The actual impact of the applying IFRS 9 on the Company may differ from this
estimate. The Company continues to improve models, methodologies and systems and monitor regulatory developments prior to the
adoption of IFRS 9 on January 1, 2023G.

5. Overall Impact on Total Shareholders’ Equity of Transition to IFRS 17 and IFRS 9

The Company estimates that upon application of IFRS 17 and IFRS 9, the impact of these changes (before Zakat) is a reduction in the
Company’s total equity of SAR (46.8 million) as of January 1, 2022G.

SAR
Estimated Increase (Decrease) in the Company’s Total Equity when Transitioning to:
January 1, 2022G

IFRS 17 (46,760,846)

IFRS 9 (18,410)

Estimated Impact of Applying IFRS 17 Before Zakat (46,779,256)

- Amendment to IFRS 16 – Sale and Leaseback Leases

These amendments incorporate the sale and leaseback requirements in IFRS 16 to explain how an entity accounts for a sale and
leaseback after the date of the transaction. Sale and leaseback transactions where some or all of the lease payments are variable
lease payments not based on an index or rate are likely to be affected.

Effective Date:
Annual periods beginning on or after January 1, 2024G.

Impact Assessment
The administration is currently evaluating the impact of these amendments, but in any case, no significant impact is expected.

- Amendments to IAS 1, Presentation of Financial Statements, Non-Current Liabilities with Commitments.

These amendments clarify how the conditions with which an entity must comply within the twelve months after the reporting period affect the
compliance rating.

Effective Date:
Annual periods beginning on or after January 1, 2024G.

Impact Assessment
The administration is currently evaluating the impact of these amendments, but in any case, no significant impact is expected.

- Limited Scope Amendments to IAS1, Practice Statement 2 for IFRS and IAS 8
The amendments are intended to improve accounting policy disclosures and help users of financial statements distinguish between changes in
accounting estimates and policies.

Effective Date:
Deferred until accounting periods that do not start before January 1, 2023G.

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Impact Assessment
The administration is currently evaluating the impact of these amendments, but in any case, no significant impact is expected.

- Amendment to IAS 12 – Deferred Tax Relating to Assets and Liabilities Resulting from a Single Transaction
These amendments require companies to recognize deferred tax on transactions that, upon initial recognition, result in equal amounts of taxable
and deductible temporary differences.

Effective Date:
Annual periods beginning on or after January 1, 2023G.

Impact Assessment
Management is currently evaluating the impact of these amendments, but in any case, no significant impact is expected.

5.3.3 Recognition of Insurance Premiums and Reinsurance Commissions

Premiums and commissions are recorded in the income statement according to the conditions of the relevant insurance policies on a pro rata
basis. A portion of the premiums and reinsurance commissions that will be earned in the future are recorded as unearned premiums and earned
reinsurance commissions, respectively, and are deferred in the following ways:

- The last three months of the period for sea freight,

- Pre-defined calculation for the engineering sector for risks beyond one year. According to this calculation, lower premiums
are earned in the first year and then gradually increase until the end of the policy period, and
- The actual number of days for all other insurance categories.
Unearned premiums represent the share of premiums written relating to the period of coverage in effect. The change in the unearned premium
allowance is recognized in the income statement in the same manner as revenue is recognized over the risk period.

5.3.4 Commission Revenue, Profit Distribution and Other Income

Commission revenue from short-term deposits and long-term deposits is recognized on a time proportion basis using the effective interest
rate method. It is excluded under “Commission and Investment Revenue” in the income statement. Dividend revenue is recognized when the
right to receive the dividend is established. It is included in the profits generated from available-for-sale investments in the income statement.
The revenue of the Manefeth Fund (Third Party Liability Insurance Fund) and the Umrah Fund for Medical Insurance, General Insurance and
Accident Insurance are recognized as other income on a quarterly basis according to the financial statements issued by the Fund Manager, i.e.,
the Cooperative Insurance Company.

5.3.5 Insurance Contracts

Insurance contracts are those contracts in which the Company (the “Insurer”) accepts significant insurance risk from another party (the
“Policyholders”) by agreeing to compensate the policyholders if a specified uncertain future event (the “Insured Event”) may negatively
affect policyholders. As a general guideline, the Company defines significant insurance risk as the possibility of having to pay benefits on the
occurrence of an insured event, if the insured event did not occur.

5.3.6 Claims
Claims consist of amounts payable to policyholders and related loss adjustment expenses, net of scrap and other recoveries, and are charged to
the income statement when incurred.

Total outstanding claims consist of the sum of the estimated cost of claims incurred but outstanding at the reporting date, whether reported
or not. Provisions are made for unpaid reported claims as at the reporting date on a case-by-case basis. In addition, based on management’s
estimates and the Company’s experience, a provision is maintained for the cost of settling claims incurred but not reported, at the statement of
financial position date. The final liabilities may be more or less than the amount set aside.

Any difference between the allocations at the date of the financial statements and the settlements in the following year is included in the
subscription account for that year. Outstanding claims are presented on an aggregate basis and the reinsurer share is presented separately. The
Company does not deduct its liabilities for unpaid claims as virtually all claims are expected to be paid within one year from the date of the
statement of financial position.

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5.3.7 Scrap and Compensation Recovery
Some insurance contracts allow the Company to sell purchased property (generally damaged) when the claim is settled (e.g., scrap). The
Company has also the right to pursue third parties to pay some or all of its costs (such as compensation).

Compensation recovery estimates are included when measuring outstanding claims liabilities. The provision represents the amount that can be
reasonably recovered from the disposal of the asset.

Compensation recovery is considered a provision when measuring outstanding claims liabilities. This provision is an estimate of the amount
that can be recovered from third parties.

5.3.8 Reinsurance
The Company’s reinsurance program is affected by proportional, non-proportional and discretionary deposits based on its net revenue retention
policy, treaty limitations and the nature and extent of risks. The Company waives insurance risk in the ordinary course of business for all of its
products. Reinsurance assets represent balances due from reinsurance companies. Recoverable amounts are estimated in a manner consistent
with the provision for outstanding claims and are made in accordance with reinsurance contracts. Impairment is reviewed at each reporting date
or more frequently when an indicator of impairment arises during the reporting year. Impairment occurs when there is objective evidence that
the Company may not recover amounts due under the terms of the contract and when the effect on the amounts the Company will receive from
reinsurers can be measured reliably. An impairment loss is recognized in the income statement.

Arrangements made for ceded reinsurance do not relieve the Company of its obligations to policyholders.

Premiums and claims on assumed reinsurance are recognized as income and expense in the same manner as if the reinsurance were a direct
business, taking into account the product classification of the reinsured business. Reinsurance liabilities represent balances required by
reinsurance companies. The amounts payable is determined in a manner consistent with the associated reinsurance contract.

Reinsurance assets or liabilities are derecognized when contractual rights expire or the contract is transferred to another party.

Recoveries receivable from reinsurers are recognized as an asset at the same time that claims that give rise to the right of recovery are
recognized as liabilities and are measured at the amount expected to be recovered.

5.3.9 The Liability Adequacy Test (LAT)

At each date of issuance of the financial position statement, the Company reviews its unexpired risks and a liability adequacy test is performed
to determine whether there is any aggregate excess of expected claims and deferred policy acquisition costs over unearned premiums. This test
uses current estimates of future contractual cash flow for insurance contracts after taking into account the return on investment expected to
arise on the assets relating to the relevant insurance technical provisions. If these estimates show that the carrying value of unearned premiums
(less related deferred policy acquisition costs) is insufficient, the deficiency is recognized in the income statement by creating a provision for it.

5.3.10 Insurance Contract Liabilities

Insurance contract liabilities include provision for outstanding claims, claims incurred but not reported, provision for additional premium
reserves, unearned insurance premiums (including provision for insufficient premiums) and other technical reserves. The provision for
outstanding claims and claims incurred but not reported is calculated based on the estimated final cost of all claims incurred and outstanding at
the reporting date, whether reported or not, plus claims processing costs and reduced by the expected value of recoveries and other recoveries.
Delays may be encountered in the reporting and settlement of certain types of claims; Therefore, the ultimate cost of these claims cannot be
determined with certainty at the reporting date. Liabilities are calculated at the reporting date using a range of standard actuarial techniques
based on empirical data and current assumptions. Liabilities are not discounted for the time value of money. Liabilities cease to be recognized
when the obligation to pay a claim expires, is settled or cancelled.

The provision for unearned premiums represents that portion of insurance premiums received or receivable relating to risks that have not
expired at the reporting date. The provision is recognized when contracts are concluded and insurance premiums are paid, and is posted on the
account as insurance premium income over the contract period according to the type of insurance stipulated in the contract. At each reporting
date, the Company conducts a review of unexpired risks and a liability adequacy test to determine whether there is any overall excess of
expected claims and deferred acquisition costs over unearned premiums. This calculation uses current estimates of future contractual cash flow
after taking into account the return on investment expected to result from the assets relating to the relevant insurance technical provisions. If
these estimates show that the carrying value of unearned insurance premiums (less related deferred acquisition costs) is insufficient, a deficit is
recognized in the income statement by setting aside an insurance premium deficiency provision (additional premium reserves).

Other technical reserves include an undistributed loss adjustment expense reserve and a proportional and non-proportional reinsurance
receivables reserve. The undistributed loss adjustment expense reserve is determined at the end of each reporting period and represents
the estimated cost that the Company will incur when claims are paid. It is calculated as the amount of reinsurance premiums, reinsurance
commissions or any loss shares that are not fully accrued.

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5.3.11 Deferred Policy Acquisition Costs (DAC)
Commissions and other costs directly related to obtaining or renewing insurance contracts are deferred and amortized over the terms of the
insurance contracts, similar to insurance premiums. Other acquisition costs are recognized as expenses when incurred. Amortization is recorded
in the costs of acquiring insurance policies in the income statement.

Changes in the estimated useful life or the expected method of consuming future economic benefits embodied in this asset are calculated by
changing the amortization period, and this is considered a change in accounting estimates.

A review for impairment is conducted at the date of preparing each financial statement or within a shorter period, when there is an indication
that such impairment has occurred. If the assumptions regarding the future profitability of these insurance policies do not materialize, the
amortization of these costs may be accelerated and may require an additional write-off of impairment in the income statement. Deferred
underwriting costs are also taken into account when conducting a test of the adequacy of liabilities in each period of the financial statements’
preparation.

5.3.12 Unearned Reinsurance Commission Revenue

Commission revenue on reinsurance contracts issued is deferred and amortized according to the terms of the insurance contracts to which they
relate, similar to earned premiums. Amortization is recorded in the income statement.

5.3.13 Insurance Premiums and Reinsurance Receivables

Insurance premiums and reinsurance receivables are recognized when due, measured on initial recognition at the fair value of amounts received
or receivables, and stated at the sum less the allowance for any uncollectible amount (allowance for doubtful debts) and any impairment in their
value. Bad debts are written off as they are incurred. The carrying amounts of insurance premiums receivable and reinsurance receivables are
reviewed for impairment when events or circumstances indicate that the carrying value may not be recoverable, with the loss arising from the
impairment recognized in the income statement. Receivable insurance premiums and reinsurance receivables cease to be recognized when the
criteria for derecognition of financial assets are met.

5.3.14 Financial Assets

5.3.14.1 Classification
The Company classifies its financial assets into the following categories:

a. Loans and Receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not listed on an active market other
than those that the Company intends to sell in the short term or that have been classified as available-for-sale investments. Receivables
arising from insurance contracts are also classified in this category and are reviewed for impairment as part of the impairment review of
loans and receivables.

b. Financial Assets at Fair Value Through Profit or Loss

Financial assets at fair value through profit or loss are those investments that upon initial recognition are designated at fair value. These
investments are measured and reported at fair value, with all changes in fair value recorded through the income statement.

c. Available-for-sale Investments (AFS)

These are investments that are not held to maturity or held for trading purposes. Investments classified as “available for sale” are
subsequently measured at fair value. For available-for-sale investments whose fair value is not hedged, any unearned gain or loss resulting
from the change in fair value is recognized directly in the statement of comprehensive income until the investment is derecognized or its
value is impaired, at which time the cumulative gain or loss previously recognized is included in the statement of comprehensive income.
Comprehensive income, included in the income statement for the year. Available-for-sale investments that cannot be measured reliably are
stated at amortized cost less allowance for impairment.

d. Held-to-maturity Investments
Investments having fixed or determinable payments and fixed maturity that the Company has the positive intention and ability to hold
to maturity are classified under this category. These investments are initially recognized at fair value including direct and incremental
transaction costs and subsequently measured at amortized cost, less provision for impairment in value. Amortized cost is calculated
by taking into account any discount or premium on acquisition using an effective yield basis. Any gain or loss on such investments is
recognized in the statement of income when the investment is derecognized or impaired.

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5.3.14.2 Recognition, Measurement and Derecognition
Loans, receivables and held-to-maturity investments are stated at amortized cost less allowance for impairment. Amortized cost is calculated
by taking into account any discount or premium on acquisition. Any gain or loss on these investments is recorded in the income statement when
investments are derecognized or impaired.

Financial assets are measured at fair value through profit or loss and are carried at fair value. Any subsequent changes in fair value are
recognized in the income statement.

Financial assets are derecognized when the right to receive cash flow from those assets expire, or when they are transferred, and the Company
has transferred substantially all the risks and rewards of ownership.

Purchases and sales of available-for-sale investments are recognized on the trade date, which is the date on which the Company commits to
purchase or sell the investments. Available-for-sale investments are initially recognized at fair value plus transaction costs that are directly
related to their acquisition and are subsequently included at fair value.

Changes in the fair value of available-for-sale investments are included in the Statement of Comprehensive Income. When available-for-sale
investments are sold or impaired, the cumulative fair value adjustments recognized in equity are included in the income statement as “gains
and losses on available-for-sale investments.”

5.3.14.3 Fair Value Determination

Fair values of investments listed in active markets are based on current bid prices. If there is no active market for a financial asset, fair value
is determined using valuation techniques, which include includes comparison with recent similar operations on purely commercial grounds,
discounted cash flow analysis, and other valuation techniques commonly used by market participants. Dividends on financial assets at fair
value through profit or loss and available-for-sale investments are recognized in the income statement when the Company’s right to receive
payment has been established.

5.3.14.4 Decrease in the Value of Financial Assets

a. Financial Assets Carried at Amortized Cost

The Company assesses at each financial reporting date whether there is objective evidence that a financial asset or a group of financial
assets is impaired. A financial asset or a group of financial assets are impaired and an impairment loss is incurred only if there is objective
evidence of impairment as a result of one or more events occurring after the initial recognition of the asset and such that the loss event (or
events) has an impact on the estimated future cash flow of the financial asset or a group of financial assets that can be estimated reliably.

If the amount of the impairment loss subsequently decreases, and the decrease is objectively related to an event occurring after the
impairment was recognized, the previously recognized impairment loss is reversed by adjusting the allowance account. The amount of the
reversal is recognized in the income statement.

b. Financial Assets at Fair Value Through Profit or Loss

The Company assesses at each financial reporting date whether there is objective evidence that a financial asset or group of financial assets
is impaired. In the case of equity investments classified as a financial asset at fair value through profit or loss (FVTPL), a significant or
long-term decline in the fair value of the securities below their cost is objective evidence of impairment resulting in the recognition of an
impairment loss. An impairment loss is recognized or reversed in the income statement.

c. Available-for-sale Investments (AFSI)

At a financial reporting date, the Company assesses whether there is objective evidence that a financial asset or a group of financial assets
is impaired. In the case of investments in equity securities classified as available for sale, a significant or long-term decline in the fair value
of the securities below their cost is objective evidence of impairment resulting in the recognition of an impairment loss.

The cumulative loss is measured as the difference between acquisition cost and current fair value, less any impairment losses on those
financial assets that were previously recognized in the statement of comprehensive income are excluded from equity and recognized in
the income statement. If the fair value of a debt instrument increases in a subsequent period, it is classified as available for sale with the
possibility of objectively relating this increase to an event that has occurred after the impairment loss was recognized. The impairment loss
is reversed through the statement of comprehensive income.

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5.3.15 Financial Liabilities
All financial liabilities are recognized at the time the Company becomes a party to the contractual terms of the instrument. Financial liabilities
are initially recognized at fair value, less any directly attributable transaction costs. After initial recognition, these liabilities are measured at
amortized cost using the effective commission rate method.

Financial liabilities are derecognized when the obligation related to the liability was fulfilled, canceled, or has expired. When an existing
financial liability is replaced by another from the same lender on terms that are substantially different from the previous one, or when the terms
of an existing liability are completely modified, such an exchange or modification is treated as a derecognition of the original liability, and a
new liability is recognized. The difference in the relevant carrying amounts is recognized in the income statement.

5.3.16 Trade Date

All routine purchases and sales of financial assets are recognized/derecognized on the exchange date (i.e., the date on which the Company
commits to purchase or sell the assets). Regular way purchases or sales are purchases or sales of financial assets that require settlement of assets
within the time frame generally established by regulation or convention in the market place.

5.3.17 Offsetting
Financial assets and financial liabilities are offset and the net amount reported in the statement of financial position only when there is a
currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and
settle the liability simultaneously. Income and expense are not offset in the statement of comprehensive income unless required or permitted
by any accounting standard or interpretation.

5.3.18 Cash and Cash Equivalent

Cash and cash equivalents comprise of current accounts at banks and deposits that have original maturity periods not exceeding three months
from the date of acquisition.

5.3.19 Short-term and Long-term Deposits

Short-term deposits with original maturity dates longer than three months and less than one year from the date of acquisition are recognized.
Long-term deposits represent time deposits with maturity periods exceeding one year from the date of acquisition.

5.3.20 Property and Equipment

Property and equipment are initially stated at cost and subsequently at cost less accumulated depreciation and any impairment, if any. Cost
includes expenditures directly attributable to the acquisition of the items. Subsequent costs are included in the asset’s carrying amount or
recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the
Company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the
financial period in which they are incurred.

Leasehold improvements mainly consist of mobile structures that can be moved without incurring any significant cost or effort. Assets under
construction or improvement are capitalized in the capital work-in-progress (CWIP) account. Assets under construction or improvement are
transferred to the appropriate category of property and equipment when the assets are delivered to their location and condition necessary for
their intended use by management. The cost of any item of the CWIP includes the purchase price, construction/development costs and any
other costs directly attributable to the construction or acquisition of any item of the CWIP for use in the manner intended by management.
Depreciation is not charged on the CWIP.

Depreciation is charged to the income statement on a straight-line basis based on the following estimated useful lives:

Origin Years

Improvements to rental properties 10

Office furniture, fixtures and equipment 4-10

Computers 4

Vehicles 4
Source: The company’s audited financial statements for the financial year ending on December 31, 2022

The useful lives of assets are reviewed at the end of each reporting date and adjusted, if necessary. The carrying amount of an asset is reduced
immediately to its recoverable amount if the carrying amount of the asset is greater than its estimated recoverable amount. Gains and losses on
disposal are determined by comparing the return on disposal with the book value. It is included in the income statement under other income.

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5.3.21 Goodwill
Goodwill represents the excess of the fair value of the purchase consideration payable in accordance with the directives of the Saudi Central
Bank over the identifiable net assets acquired from the Saudi Al Sagr Insurance Company (sister company). The recoverability of goodwill is
reviewed for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment
loss is recognized at the amount by which the carrying amount of the asset exceeds its recoverable amount. The recoverable amount represents
the higher of the asset’s fair value less costs to sell and its value in use.

5.3.22 Intangible Assets

Intangible assets include software, which is measured at cost. Intangible assets with finite useful lives are amortized over their estimated
useful lives in accordance with the expected pattern of consumption of economic benefits. The estimated useful life of the software is four
years. Intangible assets with an indefinite useful life (including goodwill) are not subject to amortization but are tested for impairment at one
or more statement of financial position dates if there is an indication of impairment. Intangible assets with finite useful lives are reviewed for
impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. The amortization expense is
included in general and administrative expenses in the income statement.

5.3.23 Impairment of Non-financial Assets

At each reporting date, the Company assesses whether there is any indication that an asset may be impaired. If such indication exists or when
annual impairment testing is required, the Company estimates the asset’s recoverable amount. An asset’s recoverable amount is greater than its
fair value or the fair value of the cash-generating unit less costs to sell and its value-in-use. The recoverable amount of an asset is determined
unless the asset generates cash flows that are largely independent of those from other assets or a group of assets. When the carrying value of an
asset or cash-generating unit exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

In assessing value-in-use, the estimated future cash flows are discounted to their present values using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset. When determining fair value less costs to sell, recent market
transactions are taken into account. If these parameters cannot be determined, an appropriate valuation method is used. These calculations are
augmented by multiple valuation methods, listed stock prices of companies or other available indicators of fair value.

The Company calculates impairment based on detailed budgets and forecast calculations, which are prepared independently for each of the
Company’s cash-generating units to which assets are allocated. These budgets and forecast accounts generally cover a period of five years. For
longer periods, the long-term growth rate is calculated and applied to the projects’ expected future cash flows after year five. Losses arising
from impairment are recognized in the income statement.

5.3.24 Provisions and Other Liabilities

Provisions are recognized when the Company has an obligation (legal or constructive) as a result of past events such that the costs of settling
the obligation are probable and can be reliably measured. Provisions for future operating losses are not recognized. Liabilities are recognized
for amounts to be paid in the future for goods or services obtained, whether invoiced by the supplier or not.

5.3.25 Employees End of Service Benefits

The Company has a single post-employment benefit program system for its defined benefit plan, which is based on the Saudi Labor and
Workmen Law, the last salary, and years of service.

Employee benefit systems are not funded, therefore, liabilities under these plans are valued by an independent actuary based on the projected
unit credit method. The costs associated with these systems consist primarily of the present value attributable to each year of services on an
equal basis, and interest on this liability in respect of employee services in prior years.

Current, past and post-employment service costs are recognized immediately in the income statement, while settlement of the obligation is
recorded at the discount rates used in the income statement. Any changes in net liabilities, resulting from actuarial valuations and changes in
assumptions, are considered as a remeasurement in the statement of comprehensive income.

Remeasurements of gains and losses that arise from adjustments to experience and changes in actuarial assumptions are recognized directly in
the statement of comprehensive income and transferred to retained earnings in the statement of changes in equity in the period in which they
occur.

Changes in the present value of the defined benefit obligation resulting from plan modifications or curtailments are recognized immediately
in the income statement as past service costs. End-of-service payments are based primarily on employees’ final salaries, allowances, and
accumulated years of service, as described in the Saudi Labor and Workmen Law.

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5.3.26 Dividends
Shareholders’ dividends are recognized as a liability in the Company’s financial statements during the year in which dividends are approved
by Shareholders.

5.3.27 Zakat
The Company is subject to Zakat in accordance with the regulations of the Zakat, Tax and Customs Authority (“ZATCA”) (“the Authority”).
Zakat is calculated based on the approximate Zakat base and adjusted net income, whichever is higher. Additional amounts, if any, will be
charged when they are determined to be required for payment. Zakat entitlement is recorded on a quarterly basis.

5.3.28 Foreign Currencies

Transactions in foreign currencies are recorded in Saudi Riyals (SAR) at the exchange rate prevailing on the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies are converted into Saudi Riyals at the exchange rate prevailing on the date of the
statement of financial position. All differences, except those arising on available-for-sale financial assets, are recognized in the income
statement. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as
at the date of the initial transaction and are not subsequently readjusted. Since the Company’s foreign currency transactions are primarily
denominated in US Dollars and pegged to Saudi Riyals, foreign exchange gains and losses are not material.

5.3.29 Right-of-use (ROU) Assets and Lease Liabilities

The Company evaluates whether the agreement contains a lease, at the inception of the contract. The Company recognizes a right-of-use asset
and its corresponding lease liability in respect of all lease agreements in which the Company is a lessee, with the exception of short-term
leases (which are leases with a term of twelve months or less) and leases of low-value assets. For these leases, the Company recognizes lease
payments as operating expenses on a straight-line basis over the term of the lease unless another systematic basis is more representative of the
time pattern in which the economic benefits from the leased asset are consumed.

Lease liabilities are initially measured at the present value of the unpaid lease payments at the lease commencement date, discounted using the
interest rate implicit in the lease. If that rate cannot be easily determined, the Group uses the additional borrowing rate.

The lease liability, if any, is presented as a separate line item in the statement of financial position.

The lease contract’s liabilities are subsequently measured by increasing the carrying amount to reflect the interest on the lease liabilities (using
the effective interest rate method) and reducing the carrying amount to reflect the lease payments.

The Company remeasures the lease liabilities (with a similar settlement being made on right-of-use assets) when:

- The lease term changes, or estimates to exercise the right to purchase are modified, in which case the lease liabilities are
remeasured by discounting the adjusted lease payments using a modified discount rate.
- The lease payments vary as a result of changes in an index or rate or a change in payments related to residual value guarantees,
in which case lease liabilities are remeasured by discounting the adjusted lease payments using the initial discount rate (unless
the change in lease payments is due to a variable interest rate, in this case, a modified discount rate is used); and
- The lease is modified and the modification is not accounted for as a new lease. In this case, lease liabilities are remeasured
by discounting the modified lease payments using a modified discount rate.
Right-of-use assets include the initial measurement of the associated lease liabilities and lease payments made at or before the commencement
of the lease, as well as initial direct costs. They are subsequently measured at cost less accumulated depreciation and accumulated impairment
losses, if any.

Right-of-use assets are depreciated over the shorter term of the lease or the economic life of the leased assets. If the lease involves a transfer of
ownership of the leased asset or if the cost of the right-of-use asset reflects the Group’s expectation that it will exercise the right-to-purchase
option, the right-of-use asset is depreciated over the economic life of the leased asset. Depreciation begins at the beginning of the lease.

Right-of-use assets are presented in the statement of financial position as a separate item, if any.

The Company applies IAS 36 Impairment of Assets to determine whether a right-of-use asset is impaired and the recognition of any identified
impairment loss.

Based on the impact assessment conducted by management, the identified impact from the adoption of IFRS 16 was not material and,
accordingly, no adjustments have been recognized by management in the accompanying financial statements.

The Company used the exemption available in IFRS 16 - Leases, for short-term leases and leases of low-value assets, which were recognized
on a straight-line basis as an expense in the income statement and amounted to SAR (1.3 million) and SAR (0.7 million) for the year ended
December 31, 2022G and 2021G, respectively.

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5.4 Operation Results

5.4.1 Performance Indicator

Table No. (24): Performance Indicator

Financial Year Ended December 31

Performance Indicator
2020G (Audited) 2021G (Audited) 2022G (Audited)

Growth rate of gross written premiums N/A 15.6% 8.4%

Attribution rate (includes net loss premiums) 17.1% 14.9% 13.8%

Net premiums earned as a percentage of gross written premiums 82.9% 85.1% 87.0%

Net loss rate 111.8% 105.2% 94.9%

The commission paid as a percentage of the total insurance premiums written 1.7% 1.1% 1.4%

Commission received as a percentage of the premiums assigned 15.8% 10.1% 15.7%

Net commission percentage 6.2% 6.4% 6.9%

Net expense ratio 22.1% 21.1% 19.9%

Source: Audited Financial Statements for the Financial Years ending on December 31, 2020G, 2021G and 2022G

5.4.2 Income Statement

The following table shows the income statement for the fiscal years ending on December 31, 2020G, 2021G, and 2022G.

Table No. (25): Income Statement

Fiscal Year Ended December 31 Increase/(Decrease) CAGR

Thousands Saudi Riyals
2020G 2021G 2022G December December
(2020G-2022G)
(Audited) (Audited) (Audited) 2021G 2022G

Revenues

Gross written premiums 379,114 438,300 475,264 15.6% 8.4% 12.0%

Reinsurance premium assigned/ceded:

Foreign (37,499) (44,856) (40,312) 19.6% (10.1%) 3.7%

Local (2,416) (896) (1,895) (62.9%) 111.4% (11.4%)

Loss surplus premiums:

Foreign (21,293) (15,091) (19,605) (29.1%) 29.9% (4.0%)

Local (3,738) (4,473) (3,691) 19.7% (17.5%) (0.6%)

Net written premiums 314,168 372,983 409,761 18.7% 9.9% 14.2%

Changes in unearned insurance premiums 59,305 (75,076) (914) (226.6%) (98.8%) NA

Changes in reinsurers share of unearned premiums 3,849 8,543 580 121.9% (93.2%) (61.2%)

Net premiums earned 377,322 306,450 409,427 (18.8%) 33.6% 4.2%

Reinsurance Commission 6,315 4,628 6,614 (26.7%) 42.9% 2.3%

Total Revenue 383,637 311,078 416,040 (18.9%) 33.7% 4.1%

Underwriting costs and expenses:

Total paid liabilities (495,300) (373,258) (389,825) (24.6%) 4.4% (11.3%)

Reinsurers share of claims paid 85,390 16,772 23,072 (80.4%) 37.6% (48.0%)

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 Fiscal Year Ended December 31 Increase/(Decrease) CAGR
Thousands Saudi Riyals
2020G 2021G 2022G December December
(2020G-2022G)
(Audited) (Audited) (Audited) 2021G 2022G

Claims administration expenses (17,036) (20,704) (26,436) 21.5% 27.7% 24.6%

Net claims and other benefits paid (426,946) (377,190) (393,189) (11.7%) 4.2% (4.0%)

Changes in outstanding claims 63,139 32,718 19,844 (48.2%) (39.3%) (43.9%)

Changes in reinsurers share of outstanding claims (43,146) 8,451 (21,833) (119.6%) (358.3%) (28.9%)

Changes in claims incurred but not reported (12,940) 18,363 8,884 (241.9%) (51.6%) NA

Changes in reinsurers share of claims incurred but

(1,900) (4,667) (5,623) 145.6% 20.5% 72.0%
not reported

Net claims and other benefits incurred (421,794) (322,325) (391,917) (23.6%) 21.6% (3.6%)

Policy Acquisition Costs (23,345) (19,686) (28,072) (15.7%) 42.6% 9.7%

Changes in additional insurance premium reserves 3,290 (2,185) (9,762) (166.4%) 346.7% NA

Changes in other technical reserves (4,084) 995 843 (124.4%) (15.2%) NA

Other underwriting expenses (9,620) (10,514) (8,824) 9.3% (16.1%) (4.2%)

Total underwriting costs and expenses (455,552) (353,715) (437,730) (22.4%) 23.8% (2.0%)

Net underwriting loss (71,915) (42,637) (21,690) (40.7%) (49.1%) (45.1%)

(Expenses)/ Other operational income

Recoveries from/(provision) for doubtful debts (83) (3,209) 1,028 3,754.8% (132.0%) NA

General and administrative expenses (69,381) (75,486) (80,878) 8.8% 7.1% 8.0%

Investment income and commission 12,511 6,081 3,268 (51.4%) (46.3%) (48.9%)

Change in the fair value of financial assets at

6,157 9,610 (1,582) 56.1% (116.5%) NA
FVTPL

Profits realized from available-for-sale investments 2,419 14,567 11,581 502.1% (20.5%) 118.8%

Refund of accumulated surplus due 9,187 16,042 691 74.6% (95.7%) (72.6%)

Financial costs of lease obligations - (129) (62) NA (51.8%) NA

Other income 5,126 2,462 18,748 (52.0%) 661.5% 91.2%

Total other operating expenses (34,064) (30,064) (47,206) (11.7%) 57.0% 17.7%

Total loss for the year before allocating surplus

(105,979) (72,701) (68,896) (31.4%) (5.2%) (19.4%)
and Zakat

Surplus returned to insurance operations - - - NA NA NA

Total Loss before Zakat (105,979) (72,701) (68,896) (31.4%) (5.2%) (19.4%)

Zakat expense (6,500) (1,770) (4,600) (72.8) 159.9% (15.9%)

Total loss attributable to shareholders (112,479) (74,471) (73,496) (33.8%) (1.3%) (19.2%)

Probable average number of outstanding shares 40,000 14,000 14,000 (65.0%) - (40.8%)

Loss per share (in Saudi Riyals per share)

Loss of basic share (2,8) (5,3) (5,2) 89.2% (1.3%) 36.6%

Diluted loss per share (2,8) (5,3) (5,2) 89.2% (1.3%) 36.6%

Other comprehensive income (loss):

Items that will not be reclassified in the income statement in the subsequent years:

Remeasurement of employee benefits obligations’

1,825 1,079 1,550 (40.9%) 43.6% (7.9%)
profit

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 Fiscal Year Ended December 31 Increase/(Decrease) CAGR
Thousands Saudi Riyals
2020G 2021G 2022G December December
(2020G-2022G)
(Audited) (Audited) (Audited) 2021G 2022G

Items that will be reclassified in the income statement in the subsequent years:

Net change in the fair value of available-for-sale

2,989 (1,113) (11,005) (137.2%) 888.9% NA
investments

Total (loss) other comprehensive income 4,814 (34) (9,456) (100.7%) 27,571.4% NA

Total comprehensive loss for the year/period (107,665) (74,505) (82,952) (30.8%) 11.3% (12.2%)
Source: Audited Financial Statements for the Financial Years ending on December 31, 2020G, 2021G and 2022G.

Gross Written Premiums (GWP)

The health and vehicle sector are the Company’s main business sectors, as they both contributed by 88.0%, 88.0% and 89.1% of the gross
written insurance premiums recorded during the fiscal years 2020G, 2021G, and 2022G, respectively.

Gross Written Premiums increased by 15.6% from SAR (379.1 million) in the year 2020G to SAR (438.3 million) in the year 2021G, as a result
of the noticeable growth mainly in the vehicle sector, which recorded an increase in the gross written premiums by 88.6% or the equivalent of
SAR (109.9 million), from SAR (124.0 million) in 2020G to SAR (233.8 million) in 2021G. In general, the high activity rate under the motor
sector can be mainly attributed to the Company’s tendency to work on increasing its business volume in this sector during 2021G, by reducing
prices which led to an increase in the volume of sales through electronic insurance brokers such as “Tameeni wa Tameenak” (My Insurance
and your Insurance).

The balance of gross written premiums continued to increase by 8.4%, or SAR (37.0 million), to reach SAR (475.3 million) during 2022G.
The additional increase in 2022G was mainly influenced by a rise in gross written premiums for the medical sector by 52.9% from SAR (151.9
million) in 2021G to SAR (232.2 million) in 2022G. It should be noted that the aforementioned increase in medical sector insurance premiums
was offset by a decrease in written insurance premiums in the vehicle, property and casualty sectors by 18.3% and 1.2%, respectively, during
2022G. The increase in premiums for the medical insurance sector was affected by some regulatory decisions that the Company had issued
during 2021G, and the change of the third administrative party, in addition to the decrease in the realized loss percentage for the medical sector,
which reached 63.0% during 2022G compared to 96.9% in 2021G. While the decrease in insurance premiums under the vehicle sector resulted
from a reduction in the volume of business after the Company has achieved high losses in 2021G, which led the Company to take a decision to
reduce the number of policies subscribed in this sector during 2022G.

Reinsurance Premiums Assigned and Excess of Loss Expenses

The Company carries out reinsurance according to a risk management strategy with the aim of protecting the business from potential losses
and securing additional growth potential. Reinsurance operations are carried out under proportional and optional reinsurance agreements and
contracts, and surplus loss reinsurance.

The assignment rate decreased in 2021G to 14.9% compared to 17.1% in 2020G. This is mainly due to the decrease in the medical sector
assignment rate, which reached 8.9% compared to 10.3% in 2020G. This rate was relatively high in 2020G, given that the surplus loss was
at high levels after recording paid claims, the number of which reached (1.9 million) claims during the aforementioned year. The Company
changed the third administrative party and appointed a new company more capable of controlling claims management, which led to a decrease
in the number of claims filed to (1.1 million) claims during 2021G.

Reinsurance premiums assigned rate continued to decline in 2022G, reaching 13.8% due to the decrease in the rate of the medical, property,
and casualty sectors which reached 7.2% and 83.1%, respectively, compared to 8.9% and 88.5% in 2021G. While the continuing decline in
the medical sector attribution rate was affected by changing the third administrative party and improving the ability and control to accurately
manage and track claims, the decrease in the assignment rate related to the property and casualty sectors resulted from the Company’s decision
to reduce the assignment rate in the general accident insurance sector based on reinsurance agreements from 70.0% in 2021G, reaching 58.0%
in 2022G, and in the marine insurance sector, from 87.0% in 2021G, reaching 73.0% in 2022G.

Net Premiums Written

The variation in net written insurance premiums was mainly related to the vehicle sector, which recorded the highest retention rate among all
the Company’s sectors, as it reached 97.5% between 2020G and 2022G. Net written insurance premiums for the vehicle sector represented the
highest percentage of the total net written insurance premiums at a rate of 48.4% between 2020G and 2022G, then the medical sector came in
second place, as the retention rate associated with this sector reached 91.2% in the period between 2020G and 2022G. Net written insurance
premiums in the medical sector represented an average of 49.8% of the total net written insurance premiums in the period between 2020G and
2022G.

Net written premiums increased by 18.7% from SAR (314.2 million) in 2020G to reach SAR (373.0 million) in 2021G. Then, an additional
increase of 9.9% was recorded in 2022G, reaching SAR (409.8 million) during the aforementioned year. The aforementioned increases were
generally in line with the rise in the level of the Company’s business, especially under the vehicle/motor sector (in 2021G) and the medical

68
sector (in 2022G).

Changes in Unearned Premiums

The net change in unearned premiums represents the difference between net premiums written and net premiums earned during each year. The
value of changes in unearned insurance premiums was positive at a value of SAR (59.3 million) in 2020G, before the change became negative
at a value of SAR (75.1 million) in 2021G. The negative change value returned and decreased by 98.8%, or SAR (74.2 million), from a negative
change of SAR (75.1 million) in 2021G, to a negative change of SAR (0.9 million). The value of these changes fluctuates during the normal
course of business.

Net Premiums Earned

Net earned premiums decreased by 18.8% from SAR (377.3 million) in 2020G to SAR (306.4 million) in 2021G. The aforementioned decrease
was mainly related to the medical sector, which recorded a decrease in net earned insurance premiums by 26.4% from SAR (187.9 million) in
2020G to SAR (138.4 million) in 2021G. As mentioned previously, the decrease in premiums under this segment resulted from the Company
reviewing, increasing prices during the year, and then restricting the network of care providers, which resulted in a corresponding decrease in
the total medical business in the Small and medium-sized enterprises (SMEs).

In 2022G, net earned premiums increased by 33.6% from SAR (306.4 million) in 2021G to SAR (409.4 million) in 2022G. The aforementioned
increase included all operating sectors as a result of the Company taking some control measures, which in turn led to improved performance
in those sectors, as previously stated.

Reinsurance Commissions
Reinsurance commissions represent income generated from reinsurance arrangements/agreements. Reinsurance commissions in the majority
of reinsurance arrangements/agreements depend on the profitability of the reinsured portfolio, which is affected (positively and negatively) in
the event of an increase and a decrease in claims incurred. Reinsurance commissions were mainly concentrated in commissions earned from
the property and casualty sector, as commissions from this sector constituted to 98.4% of the total commissions between the years 2020G and
2022G. Total reinsurance commissions decreased by 26.7%, or SAR (1.7 million), from SAR (6.3 million) s in 2020G to SAR (4.6 million)
in 2021G, as a result of the decrease in reinsurance commissions for the property and casualty sector and the expansion in the volume of
professional business compensation insurance which led to a decrease in the commission rate as a percentage of the total premiums assigned.
The value of commissions rose again to the usual level by 42.9% and reached SAR (6.6 million) in 2022G.

Net Claims and Other Benefits Paid

Net claims and other benefits paid include total claims paid, reinsurers’ share of claims paid and claims administration expenses. For more
information about the nature of the aforementioned components, please refer to the subsequent sections.

With regard to the total paid claims, the total paid liabilities decreased by 24.6%, or SAR (122.0 million), from SAR (495.3 million) in 2020G
to SAR (373.2 million) in 2021G, then the total partially increased by 4.4%, or from SAR (16.6 million) to SAR (389.8 million) in 2022G.
While the decline in 2021G was driven by a general decline in the business volume of the medical sector by 27.5% in 2021G, which led to a
decrease in liabilities paid by 41.4%, from SAR (378.7 million) in 2020G to SAR (221.8 million) in 2021G. The slight increase in 2022G was
driven by an increase in paid liabilities in the motor sector as a result of the expansion in volume of this sector in 2021G, which had an impact
on the total liabilities between 2021G and 2022G.

Regarding the reinsurer’s share of paid claims, the value of the aforementioned share decreased by 80.4%, or SAR (68.6 million), from SAR
(85.4 million) in 2020G to SAR (16.8 million) in 2021G, in line with the decrease in the business volume of the medical sector, then rose by
37.6%, or from SAR (6.3 million) to SAR (23.1 million) in 2022G, after an increase in the volume of claims from the motor, property and
casualty sectors for the reasons mentioned previously.

Claims management expenses gradually increased by 21.5%, or SAR (3.7 million), from SAR (17.0 million) in 2020G to SAR (20.7 million)
in 2021G, with a continuous increase of 27.7%, from SAR (5.7 million), to SAR (26.4 million) in 2022G. The aforementioned increase was
affected by the rise in expenses related to Najm Company, specialized in managing claims for the vehicle sector, which increased in volume
during 2021G and led to an increase in the percentage of claims between 2021G and 2022G, against the backdrop of an increase in the volume
of business in this sector during 2021G by 88.6%.

Changes in Outstanding Claims

Changes in outstanding claims and changes in claims incurred but not reported represent changes in the reserve for estimated claims and
claims incurred but not reported that are estimated by the actuary during the year. The value of these changes decreased by 48.2%, or SAR
(30.4 million), and dropped from SAR (63.1 million) in 2020G to SAR (32.7 million) in 2021G, with an additional decline of 39.3%, or from
SAR (12.9 million) to SAR (19.8 million) in 2022G. The ongoing decline was affected by the appointment of a new third administrative party
with the ability and control to accurately manage and track claims, which allowed the Company to settle all claims carried over from previous
periods and control the accuracy of claims and allocations, in addition to the issuance of the Council of Health Insurance decision stipulating
the settlement of all claims related to previous periods.

69
Changes in Reinsurers Share of Outstanding Claims
The reinsurer’s share of outstanding claims is determined by the reinsurance agreement for each of the Company’s insurance sectors. The value
of the changes was negative in 2020G, and a negative change of SAR (43.1 million) was recorded in 2020G. Then, in 2021G, a positive change
of SAR (8.5 million) was recorded, before the same value became negative once again and dropped to SAR (21.8 million) in 2022G. It should
be noted that the value of these changes fluctuates constantly and is affected by the value of the provisions made up for the outstanding claims
and reinsurer’s share in accordance with the reinsurance agreements concluded between the Company and reinsurers.

Changes in Claims Incurred but Not Reported (CIBNR)

Regarding changes in claims incurred but not reported, they represent the change in the provisions’ value made for claims incurred but not
yet reported and which is expected to be reported in the subsequent period. The value of the changes fluctuated during the two years between
2020G and 2022G. It was negative in 2020G and accounted for SAR (12.9 million), before turning to a positive value and amounting to SAR
(18.4 million) in 2021G and SAR (8.9 million) in 2022G. These changes do not follow a specific trend, but rather fluctuate with the volume of
business. (In 2020G, the negative change resulted from medical sector losses carried over from the previous year, while in 2021G and 2022G
the Company’s performance improved with regard to claims management, which led to a positive change in the two aforementioned years).

Changes in Reinsurers Share of Claims Incurred but Not Reported

Changes in reinsurers’ share of claims incurred but not reported were negative throughout the period between 2020G and 2022G. The value of
these changes gradually increased by 145.6%, from SAR (1.9 million) in 2020G to SAR (4.7 million) in 2021G, with an additional increase of
20.5% to reach SAR (5.6 million) in 2022G. The increase in the value of negative changes was related to the change in the value of the reserve
from year to year in accordance with reinsurance agreements.

Policy Acquisition Costs

The cost of obtaining the policy is primarily related to commissions paid to sales intermediaries, brokers, and agents. These costs are consistent
with movements in gross written premiums. The value of these costs decreased by 15.7%, or SAR (3.7 million), from SAR (23.3 million) in
2020G to SAR (19.7 million) in 2021G. Then, they increased by 42.6% and reached SAR (28.1 million) in 2022G. The decline in 2021G was
mainly affected by a significant decline in the business of the total written insurance premiums in the medical sector which decreased by 27.5%,
from SAR (209.5 million) in 2020G to SAR (151.9 million) in 2021G. Regarding the subsequent increase, it should be noted that the Company
was obtaining insurance policies in the property and casualty sector from related parties without paying any commissions, but in 2022G, these
policies were acquired in return for noticeable costs. Moreover, the Company increased the volume of business in the comprehensive vehicle/
motor sector, usually characterized by a relatively high commission rate.

Changes in Additional Insurance Premiums and Other Technical Reserves

Changes in additional insurance premium reserves and other technical reserves included in the income statement for the fiscal years 2020G,
2021G, and 2022G are based on the recommendations of the actuary. These changes mainly represent additional premium reserves. In the case
of changes in additional insurance premium reserves, the value was positive in 2020G and accounted for SAR (3.3 million), but it recorded a
negative change of SAR (2.2 million) and SAR (9.8 million) in 2021G and 2022G. It should be noted that the value of these changes fluctuates
continuously, given that when estimates show that the book value of unearned insurance premiums (less the relevant deferred acquisition costs)
is insufficient, a deficit is recognized in the income statement by setting aside an allocation for insurance premium deficiency (additional
reserve premiums).

Other Underwriting Expenses

Other underwriting expenses mainly include expenses related to supervision, inspection fees and expenses related to customer inquiries. Other
underwriting expenses increased by 9.3% in 2021G to reach SAR (10.5 million), compared to SAR (9.6 million) in 2020G, as a result of the
rise in customer inquiry service expenses. The aforementioned increase was in line with the augmentation in written insurance premiums,
specifically in the retail sector, which in turn witnessed a higher number of inquiries compared to other sectors. Other underwriting expenses
decreased by 16.1% and dropped to SAR (8.8 million) in 2022G, after a relative decrease in written insurance premiums in the retail sector
and an increase in business in the other corporate sector. As a result, the cost related to inquiries about the insured decreased, which led to a
decline in this cost.

Recovery / (Provision) for Doubtful Debts

Provision for doubtful debts relates to the carrying amount of premiums receivable due for a long period of time and for which events or
circumstances indicate that the carrying amount may be recoverable. The Company reviews the book value of insurance and reinsurance
premiums receivable in accordance with the guidelines set by the Saudi Central Bank and then records the change in the decrease of the late
premiums due as a provision for doubtful debts. These provisions (or recoveries) do not follow a specific trend but are affected by the collection
process.

70
General and Administrative Expenses
General and administrative expenses did not witness any fundamental change, as they increased by 8.8% in 2021G, reaching SAR (75.5
million), compared to SAR (69.4 million) in 2020G. General and administrative expenses continued to rise by 7.1% in 2022G and amounted
to SAR (80.9 million), compared to SAR (75.5 million) in 2021G. This type of expenses mainly consists of the cost of salaries and benefits for
administrative employees. The increase in these expenses was affected by the rise in the cost of salaries, benefits, professional fees, and repair
and maintenance expenses during the aforementioned years.

Investment Income and Commission

Net investment income consists of commission income on deposits, debt instruments, dividends from investment funds, as well as profits/
(losses) from the sale of available-for-sale investments, less any impairment charge on available-for-sale investments. The aforementioned
revenues decreased by 51.4%, or SAR (6.4 million), and dropped from SAR (12.5 million) in 2020G to SAR (6.1 million) in 2021G, with an
additional decrease of 46.3% to reach SAR (3.3 million) in 2022G. This gradual decline was affected by the decrease in the rate of return on
those investments between 2021G and 2022G.

Change in the Fair Value of Financial Assets at Fair Value Through Profit or Loss (FVTPL)
The fair value of financial assets at FVTPL relates primarily to available-for-sale investments and financial assets at fair value. It should be
noted that a review of available-for-sale investments and financial assets at FVTPL is conducted to assess the extent to which these investments
are exposed to impairment, and profit and loss from changes in this value are reflected in the income statement.

Profits Generated from Available-for-sale Investments

Profits generated from available-for-sale investments are obtained from excluding available-for-sale investments that are sold by the Company.
These profits do not follow a specific trend, but rather fluctuate constantly with the size of the portfolio of investments sold.

Accumulated Surplus Refund

In accordance with Article No. (35) of the Saudi Central Bank policy for distributing surplus, the Company reacquired the outstanding unclaimed
surplus amounting to SAR (9.2 million), SAR (16.0 million), and SAR (0.7 million) in 2020G, 2021G and 2022G respectively. Regarding the
refund of the surplus due, it represents the refund of the unclaimed surplus calculated at 10.0% of the net profit of the policyholders. According
to the approved surplus distribution policy, this profit can be returned in the income statement if it remains unclaimed after five years from the
date of distribution. In light of this, the unclaimed surplus for 2015G, 2016G, and 2017G, which amounted to SAR (9.2 million), SAR (16.0
million), and SAR (0.7 million) was refunded during the years 2020G, 2021G, and 2022G, respectively.

Financial Costs of Lease Contracts Obligation

The financial costs of lease contracts are related to assets acquired by the Company under capital lease contracts, which mainly include office
buildings and points of sale. These costs did not witness any noticeable change between 2021G and 2022G.

Other Income
Other income consists of several components, including mainly: Umrah insurance policy income related to medical insurance, general
insurance, and accident insurance, according to an agreement signed with 28 other insurance companies. The mandatory Umrah insurance
policy is provided by the Ministry of Hajj and Umrah and approved by the Saudi Central Bank for insurance for pilgrims coming from outside
the Kingdom of Saudi Arabia, with the exception of citizens of Gulf Cooperation Council countries. This covers general accidents and health
benefits for pilgrims entering Saudi Arabia to perform Umrah and Hajj.

In light of this, other income decreased by 52.0%, or SAR (2.7 million) as a result of the restrictions imposed by the Ministry of Health in the
Kingdom of Saudi Arabia during the spread of the COVID-19 pandemic. Other income increased by 661.5%, or SAR (16.3 million) to reach
SAR (18.7 million) in 2022G after the aforementioned restrictions were lifted.

Zakat Provision
The Company received final Zakat assessments from 2012G to 2018G during 2020G, and the total additional Zakat provision according
to assessments amounted to SAR (36.3 million) for these aforementioned years. The Company submitted an appeal to the Saudi General
Secretariat of Zakat, Tax, and Customs Committees (GSZTCC) against these assessments, and a settlement request to the Settlement Committee
of the Zakat, Tax and Customs Authority (ZATCA). During 2021G, the Committee offered to reduce the Zakat assessment to an amount of
SAR (36.2 million), which the Company did not accept, and accordingly, it continued the appeal submitted to the General Secretariat of Zakat
Committees (Supreme Committees), which issued the decision. The final additional Zakat provision was assessed at SAR (36.2 million). The
Company resubmitted an appeal to the Appeal Committee to resolve tax disputes against this assessment.

71
During 2021G, the Company received an initial assessment from the ZATCA for the years between 2019G and 2020G, with an additional
obligation of SAR (9.6 million) and submitted an objection to the General Secretariat of Zakat, Tax and Customs Committees (GSTCC) against
this assessment.

The Company believes that Authority will reconsider the assessment and allow a certain deduction from the Zakat base, and that the current
value of Zakat provision maintained by the Company is sufficient to cover the uncertain Zakat provision.

Total Comprehensive Loss for the Year

In terms of overall profit (or loss), it mainly included income from profit on remeasurement of employee benefit obligations and the net change
in the fair value of available-for-sale investments. Regarding profit (or loss) associated with employee benefit obligations (end-of-service
obligation) which are measured by an actuary at the end of each year, reported profits (or losses) fluctuate constantly and are affected by
assumptions used in actuarial studies.

On the other hand, in relation to changes in the fair value of available-for-sale investments, as it was pointed out previously, these profits and
losses are related to investments recorded by the Company, the value of which is periodically evaluated.

Comprehensive loss decreased from SAR (107.7 million) in 2020G to SAR (74.5 million) in 2021G as a result of a drop in the net underwriting
loss, from SAR (71.9 million) to SAR (42.6 million) between the two years after the overall net loss rate declined and the profits realized from
available-for-sale investments and accrued accumulated surplus increased.

The value of the comprehensive loss increased from SAR (74.5 million) in 2021G to SAR (83.0 million) in 2022G, after an increase recorded
in general and administrative expenses, and in losses resulting from the net change in the fair value of available-for-sale investments, which
rose from SAR (1.1 million) in 2021G, to reach SAR (11.0 million) in 2022G.

5.4.2.1 Revenues

5.4.2.1.1 Gross Written Premiums

The following table shows the gross written premiums for the fiscal years ending on December 31, 2020G, 2021G, and 2022G.

Table No. (26): Gross Written Premiums

Fiscal Year Ended December 31 Increase/(Decrease) CAGR

Thousands Saudi Riyals
2020G 2021G 2022G December December
(2020G-2022G)
(Audited) (Audited) (Audited) 2021G 2022G

Medical 209,514 151,895 232,192 (27.5%) 52.9% 5.3%

Vehicle/ Motor 123,992 233,843 191,141 88.6% (18.3%) 24.2%

Property and Casualty 45,608 52,563 51,931 15.3% (1.2%) 6.7%

Protection and Savings - - - NA NA NA

Total 379,114 438,300 475,264 15.6% 8.4% 12.0%

Percentage of the Total

Medical 55.3% 34.7% 48.9%

Vehicle/ Motor 32.7% 53.4% 40.2%

Property and Casualty 12.0% 12.0% 10.9%

Total 100.0% 100.0% 100.0%

Source: Audited Financial Statements for the Financial Years ending on December 31, 2020G, 2021G and 2022G.

The Company issues insurance policies via direct sales through its main offices in Dammam, Riyadh, Jeddah and points of sale spread
throughout the Kingdom of Saudi Arabia, in addition to brokers approved by the authorities regulating the work in the Saudi insurance market.
Sales are concentrated in the Eastern Region, which represented an average of 72.4% of the total written insurance premiums between 2020G
and 2022G, followed by the Western Region at 14.3% and the Central Region at 13.5% during the same years.

Written insurance premiums were concentrated in the medical and vehicle/motor sectors, as insurance premiums collected from the two
aforementioned sectors constituted to 88.4% of the total written insurance premiums during the period extending between the years 2020G and
2022G. Regarding the movement of written insurance premiums, there was an increase of 15.6%, or SAR (59.2 million), from SAR (379.1
million) in 2020G to SAR (438.3 million) in 2021G, with a continuous increase of 8.4%, or a value of SAR (37.0 million), to SAR (475.3
million) in 2022G. Whereas the rise in 2020G was concentrated in the vehicle/motor sector, the subsequent additional rise was related to the
medical sector.

72
Medical Sector
The Company’s medical insurance strategy is designed to ensure that risks are well diversified in terms of type and level of benefits. This can
be achieved through diversifying sectors and geographic regions so that prices take into account current health conditions, regular review of
actual claims, product price, and detailed follow-up procedures of claims. Besides, the Company adopts a policy based on serious and active
follow-up of claims in order to cover unexpected future risks that could negatively affect its business. Hence, it has reinsurance coverage to
limit losses related to any individual claim up to SAR (60,000) per person and per year.

The medical sector is the largest sector contributing to the total written insurance premiums, which represented 55.3%, 34.7%, and 48.9% of
the gross written premiums written in 2020G, 2021G, and 2022G, respectively. Written premiums for the medical sector declined by 27.5%,
from SAR (209.5 million) in 2020G to SAR (151.9 million) in 2021G. Premiums increased by 52.9% in 2022G, reaching SAR (232.2 million).
This decrease was affected by a decline in the written insurance premiums of the medical sector for small and medium-sized companies by
SAR (60.5 million), from SAR (149.1 million) in 2020G to SAR (88.6 million) in 2021G, which is mainly due to prices review and increase, in
addition to restricting care providers’ network. Consequently, a corresponding decrease in the total medical business in the SME sector resulted,
and the subsequent increase was driven by regulatory decisions taken by the Company during 2021G, the change of the third administrative
party which has the ability and control to manage and track claims accurately, and the decrease in the medical sector’s loss percentage achieved
in 2022G, which reached 63.0% compared to 96.9% in 2021G. The Company also increased its exposure to all types of medical insurance.

Vehicle/Motor Sector
In relation to motor insurance contracts, the main risk elements are claims arising from damages relating to death, bodily injury and damage to
the other party’s property as well as similarly insured vehicles.

Potential court rulings for death, bodily injury and the extent of property damage are major factors that affect the level of claims and both risks
are covered by excess loss per accident agreements which also cover damage to more than one vehicle in a single accident. The Company has
established good risk acceptance procedures based on important insurance factors such as the driver’s age, driving experience, and vehicle’s
nature to control the quality of risks. It also has risk management procedures in place to control claim costs.

As previously stated, the increase in written insurance premiums in 2021G was driven by an increase in written insurance premiums for the
vehicle sector, which rose by 88.6%, or a value of SAR (109.9 million), from SAR (124.0 million) in 2020G to SAR (233.8 million) in 2021G,
mainly as a result of the Company’s decision to increase the size of its business in this sector during 2021G by reducing prices, which led to an
increase in the volume of sales through electronic insurance brokers such as “My insurance and your Insurance.” The value of written insurance
premiums decreased by 18.3% and reached SAR (42.7 million), SAR (191.1 million) in 2022G, after the reduction of the business volume as
a result of the losses incurred in 2021G. The volume of business carried out through electronic insurance brokers during the aforementioned
year led to noticeable losses, which prompted the Company to reduce the number of policies subscribed in this sector in the following year.

Property/Casualty (P/C) Insurance

Property insurance is designed to compensate policyholders for damage to property or lost property value. Policyholders may also receive
compensation for loss of earnings resulting from the inability to use that insured property. Substantial risks underwritten by the Company under
this category are physically examined by qualified risk engineers to ensure adequate security, safety, and fire protection. The Company also
monitors the accumulated potential risks’ nature.

Various categories of casualty insurance are underwritten such as money loss, personal accident, workers compensation, travel, general third-
party liability, and professional indemnity or compensation. The extent of losses or damages, and potential court awards towards the type of
liability are major factors influencing the level of claims.

Total written insurance premiums for property and casualty insurance increased by 15.3%, or SAR (7.0 million), from SAR (45.6 million) in
2020G to SAR (52.6 million) in 2021G, as a result of an increase in insurance premiums for the professional business compensation insurance
sector from SAR (3.0 million) in 2020G, reaching SAR (12.0 million) in 2021G, in respect to business concluded with a new client (Nesma
Group).

73
5.4.2.1.2 Reinsurance Premiums Assigned and Net Loss Premiums
The table below sets forth all incurred reinsurance premiums including net loss premiums for the financial years ending on December 31,
2020G, 2021G, and 2022G.

Table No. (27): Incurred Reinsurance Premiums and Net Loss Premiums

Fiscal Year Ended December 31 Increase/(Decrease) CAGR

Thousands Saudi Riyals
2020G 2021G 2022G December December
(2020G-2022G)
(Audited) (Audited) (Audited) 2021G 2022G

Medical (21,580) (13,481) (16,663) (37.5%) 23.6% (12.1%)

Vehicle/ Motor (2,800) (5,302) (5,674) 89.4% 7.0% 42.4%

Property and Casualty (40,566) (46,534) (43,166) 14.7% (7.2% 3.2%

Total (64,946) (65,317) (65,503) 0.6% 0.3% 0.4%

Attribution Rate: Reinsurance Premiums Assigned/Gross Premiums Written

Medical (10.3%) (8.9%) (7.2%)

Vehicle/ Motor (2.3%) (2.3%) (3.0%)

Property and Casualty (88.9%) (88.5%) (83.1%)

Total (17.1%) (14.9%) (13.8%)

Source: Audited Financial Statements for the Financial Years ending on December 31, 2020G, 2021G and 2022G.

Reinsurance premiums refers to the portion of risk that a Company transfers to another insurer who is often an expert in reinsurance. Hence,
the Company will be able to reduce potential losses when it is responsible for compensating policyholders for large sums of money, upon the
occurrence of an insured event.

Reinsurance assets represent balances due from reinsurance companies. Recoverable amounts are estimated in a manner consistent with the
provision for outstanding claims and are made in accordance with reinsurance contracts. Impairment is reviewed at each reporting date or
more frequently when an indicator of impairment arises during the reporting year. Impairment occurs when there is objective evidence that the
Company may not recover amounts due under the terms of the contract, and when the effect on the amounts the Company will receive from
reinsurers can be reliably measured. An impairment loss is recognized in the income statement.

Assigned reinsurance arrangements do not relieve the Company of its obligations to policyholders.

Premiums and claims on reinsurance assumed income and expenses are recognized in the same manner as if reinsurance were considered a
direct business, taking into account the classification of insurance business. Reinsurance liabilities represent balances required by reinsurers,
and amounts due are determined in a manner consistent with the reinsurance contract to which they relate.

Reinsurance assets or liabilities are derecognized when contractual rights expire, or when the contract is transferred to another party. Recoveries
receivable from reinsurers are recognized as an asset at the same time that claims giving rise to the right of recovery are recognized as liabilities
and are measured at the amount expected to be recovered.

While external assigned/ceded reinsurance premiums represented an average of 62.7% of the total reinsurance premiums between 2020G and
2022G, local assigned/ceded reinsurance premiums represented an average of 2.7% of the total reinsurance premiums during the aforementioned
period. On the other hand, surplus loss arrangements represented 34.7% of the total reinsurance premiums assigned between 2020G and 2022G.

Total reinsurance premiums ceded represented an average of 15.3% of the total insurance premiums written between 2020G and 2022G. The
main business sectors that the Company outsourced during this period include the property and casualty sector with an attribution rate of 86.9%,
the medical sector with an attribution rate of 8.8%, followed by the vehicles sector with an attribution rate of 2.5% between 2020G and 2022G.

In general, total reinsurance premiums ceded declined from 17.1% in 2020G to reach 13.8% in 2022G, driven by a decrease in the percentage
of the medical, property and casualty sectors attribution (as shown below).

Medical Sector
Insurance premiums in the medical sector are covered by surplus loss insurance policies, as the attribution rate for the medical sector reached
10.3% in 2020G and 8.9% in 2021G. It then recorded an additional decrease to 7.2% in 2022G. Attribution rate was relatively high in 2020G
and 2021G, given that the surplus loss was at high levels after the increase in paid claims, which reached (1.9 million) claims and (1.1 million)
claims in in 2020G and 2021G, respectively. It should be mentioned that the decrease in 2022G was driven by a decline in the total number of
claims paid, which reached (0.6 million) claims during 2022G.

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Vehicle/Motor Sector
Insurance premiums in the vehicle/motor sector are covered by surplus loss insurance policies and didn’t significantly change between 2020G
and 2021G. They represented 2.3% of total premiums assigned in the same sector, then recorded an increase of 3.0% in 2022G due to the fact
that the percentage of surplus loss under the agreement was raised from 1.5% in 2021G to reach 1.8% in the year 2022G as a result of the high
percentage of losses in this sector during 2021G, which led to raise the loss tolerance rate in the following year (2022G).

Property and Casualty Sector

The attribution rate of the property and casualty sector was almost constant between 2020G and 2021G, then recorded a decrease from 88.5%
in 2021G to 83.1% in 2022G, after the Company’s decision to reduce this rate in the general accident sector, based on reinsurance agreements,
from 70.0% in 2021G to 58.0% in 2022G, and in the (marine) ship or hull insurance sector, from 87.0% in 2021G to 73.0% in 2022G.

5.4.2.1.3 Net Written Premiums

The following table shows net written premiums for the fiscal years ending on December 31, 2020G, 2021G, and 2022G.

Table No. (28): Net Written Premiums

Fiscal Year Ended December 31 Increase/(Decrease) CAGR

Thousands Saudi Riyals
2020G 2021G 2022G December December
(2020G-2022G)
(Audited) (Audited) (Audited) 2021G 2022G

Medical 187,935 138,413 215,529 (26.4%) 55.7% 7.1%

Vehicle/ Motor 121,192 228,541 185,467 88.6% (18.8%) 23.7%

Property and Casualty 5,041 6,029 8,765 19.6% 45.4% 31.9%

Total 314,168 372,983 409,761 18.7% 9.9% 14.2%

Retention Ratio: Net Written Premiums / Gross Written Premiums

Medical 89.7% 91.1% 92.8%

Vehicle/ Motor 97.7% 97.7% 97.0%

Property and Casualty 11.1% 11.5% 16.9%

Total 82.9% 85.1% 86.2%

Source: Audited Financial Statements for the Financial Years ending on December 31, 2020G, 2021G and 2022G.

The medical and vehicle sectors constitute the main drivers of changes in net written insurance premiums, as they represented an average
of 49.4% and 48.8%, respectively, of the total net written insurance premiums between 2020G and 2022G. The average retention ratio did
not witness any fundamental changes between 2020G and 2022G, as it reached 82.9%, 85.1%, and 86.2% in 2020G, 2021G, and 2022G,
respectively. The slight change during the aforementioned period was linked to a change in the medical sector’s retention rate, which rose from
89.7% in 2020G to 92.8% in 2022G.

5.4.2.1.4 Net Earned Written Premiums

The following table shows the net earned written premiums for the fiscal years ending on December 31, 2020G, 2021G, and 2022G.

Table No. (29): Net Earned Written Premiums

Fiscal Year Ended December 31 Increase/(Decrease) CAGR

Thousands Saudi Riyals
2020G 2021G 2022G December December
(2020G-2022G)
(Audited) (Audited) (Audited) 2021G 2022G

Medical 275,121 147,226 188,070 (46.5%) 27.7% (17.3%)

Vehicle/ Motor 97,186 155,167 214,582 59.7% 38.3% 48.6%

Property and Casualty 5,015 4,056 6,775 (19.1%) 67.0% 16.2%

Total 377,322 306,450 409,427 (18.8%) 33.6% 4.2%

Percentage from Total

Medical 72.9% 48.0% 45.9%

Vehicle/ Motor 25.8% 50.6% 52.4%

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 Fiscal Year Ended December 31 Increase/(Decrease) CAGR
Thousands Saudi Riyals
2020G 2021G 2022G December December
(2020G-2022G)
(Audited) (Audited) (Audited) 2021G 2022G

Property and Casualty 1.3% 1.3% 1.7%

Total 100.0% 100.0% 100.0%

Source: Audited Financial Statements for the Financial Years ending on December 31, 2020G, 2021G and 2022G.

Net earned insurance premiums were concentrated in the medical and vehicle insurance sectors and constituted 55.6% and 42.9% of the total
balance between 2020G and 2022G.

Net earned insurance premiums decreased by 18.8% from SAR (377.3 million) in 2020 to 306.4 million in 2021G, due to a decline in gross
written premiums related to the medical sector.

Net earned premiums increased by 33.6% from SAR (306.4 million) in 2021G to SAR (409.4 million) in 2022G due to an increase in gross
written insurance premiums related to the medical sector, which rose by 52.9% from SAR (151.9 million) to SAR (232.2 million) between
2020G and 2022G.

5.4.2.1.5 Reinsurance Commissions

The following table shows reinsurance commissions for the fiscal years ending on December 31, 2020G, 2021G, and 2022G.

Table No. (30): Reinsurance Commissions

Fiscal Year Ended December 31 Increase/(Decrease) CAGR

Thousands Saudi Riyals
2020G 2021G 2022G December December
(2020G-2022G)
(Audited) (Audited) (Audited) 2021G 2022G

Medical 12 24 16 92.7% (33.4%) 13.3%

Vehicle/ Motor 86 51 81 (40.3%) 58.0% (2.9%)

Property and Casualty 6,217 4,553 6,516 (26.8%) 43.1% 2.4%

Total 6,315 4,628 6,614 (26.7%) 42.9% 2.3%

Reinsurance Commission Received as a Percentage of Assigned Premiums

Medical 15.0% 11.5% 365.2%

Vehicle/ Motor 33.8% 22.7% 12.7%

Property and Casualty 15.7% 10.0% 15.7%

Total 15.8% 10.1% 15.7%

Source: Audited Financial Statements for the Financial Years ending on December 31, 2020G, 2021G and 2022G.

Reinsurance commissions represent income generated from reinsurance agreements. Reinsurance commissions in the majority of reinsurance
agreements depend on the profitability of the reinsured portfolio, which is negatively or positively affected in the event of an increase or
decrease in incurred claims.

Medical Sector
In the case of the medical sector, no reinsurance commissions were significantly recorded since this sector is covered by surplus loss agreements
which do not require any commissions.

Vehicle Sector
Reinsurance commissions in the low-value vehicles sector were at SAR (0.1 million) between 2020G and 2022G. Additionally, commission
as a percentage of the total assigned premiums gradually decreased during the aforementioned period because it is only collected on vehicle
insurance policies of cash nature or large value, which led to a decrease in commission as a percentage of the total assigned premiums.

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Property and Casualty Sector
Reinsurance commissions were concentrated in the property and casualty sector, given that there is more than one sub-sector of the property
and casualty sector, which generally leads to a high commission rate. Regarding the value of these commissions, they decreased by 26.8%, or
SAR (1.7 million), from SAR (6.2 million) in 2020G to SAR (4.6 million) in in 2021G, as a result of the expansion of professional business
compensation insurance sector, which led to a decrease in the value of these commissions. Commission rate as a percentage of total premiums
rose to the normal level by 43.1%, or SAR (2.0 million) to reach SAR (6.5 million) in 2022G.

5.4.2.1.6 Total and Reinsurers Share of Paid Claims

The following table presents details of the total and reinsurers’ share of paid claims for the fiscal years ending December 31,2020G, 2021G,
and 2022G.

Table No. (31): Total and Reinsurers Share of Paid Claims

Fiscal Year Ended December 31 Increase/(Decrease) CAGR

Thousands Saudi Riyals
2020G 2021G 2022G December December
(2020G-2022G)
(Audited) (Audited) (Audited) 2021G 2022G

Medical (378,704) (221,759) (136,366) (41.4%) (38.5%) (40.0%)

Vehicle/ Motor (58,435) (148,547) (240,574) 154.2% 62.0% 102.9%

Property and Casualty (58,161) (2,951) (12,885) (94.9%) 336.6% (52.9%)

Total Liabilities Paid (495,300) (373,258) (389,825) (24.6%) 4.4% (11.3%)

Medical 27,624 12,728 9,199 (53.9%) (27.7%) (42.3%)

Vehicle/ Motor 274 1,902 2,656 595.0% 39.6% 211.5%

Property and Casualty 57,492 2,142 11,218 (96.3%) 423.6% (55.8%)

Total Reinsurers Share of Claims Paid 85,390 16,772 23,072 (80.4%) 37.6% (48.0%)
Expenses of Claims Management (17,036) (20,704) (26,436) 21.5% 27.7% 24.6%

Changes in Outstanding Claims 63,139 32,718 19,844 (48.2%) (39.3%) (43.9%)

Changes in Reinsurers Share of Outstanding Claims (43,146) 8,451 (21,833) (119.6%) (358.3%) (28.9%)

Changes in Claims Incurred but Not Reported (12,940) 18,363 8,884 (241.9%) (51.6%) NA
Changes in Reinsurers Share of Claims Incurred but Not
(1,900) (4,667) (5,623) 145.6% 20.5% 72.0%
Reported
Net Claims and Other Benefits Incurred (421,794) (322,325) (391,917) (23.6%) 21.6% (3.6%)
Reinsurer Share as a Percentage of Total Claims Paid

Medical 7.3% 5.7% 6.7%

Vehicle/ Motor 0.5% 1.3% 1.1%

Property and Casualty 98.8% 72.6% 87.1%

All Sectors 17.2% 4.5% 5.9%

Source: Audited Financial Statements for the Financial Years ending on December 31, 2020G, 2021G and 2022G.

Total Liabilities Paid

As previously stated, paid liabilities represented claims paid by the Company regarding claims raised by insured parties in different sectors.

Total paid liabilities decreased by 24.6% from SAR (495.3 million) in 2020G to SAR (373.3 million) in 2021G. Then, liabilities increased by
4.4% and reached SAR (389.8 million) in 2022G.

Medical Sector
Claims paid in the medical sector decreased by 41.4%, from SAR (378.7 million) in 2020G to SAR (221.8 million) in 2021G, then by
38.5% and dropped to SAR (136.4 million) in 2022G. The Company changed and restricted the network of care providers, which led to a
corresponding decrease in the total medical business in the small and medium-sized companies’ sector. Furthermore, the Company took some
supervisory decisions during 2021G and changed the third administrative party which has power and accurate control over management and
tracking of claims.

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Vehicle Sector
Claims paid for the vehicle sector increased by 154.2% from SAR (58.4 million) in 2020G to SAR (148.5 million) in 2021G, and by 62.0%
to reach SAR (240.6 million) in 2022G, as a result of the Company’s expansion during 2021G, by doing business with electronic insurance
brokers, which led to a rise in the volume of claims between 2021G and 2022G.

Property and Casualty Sector

Claims paid to the property and casualty insurance sector fluctuate from year to year based on different types and number of claims which
vary from a year to another. As there might be a year during which no claims are recorded and another year during which high value claims are
accounted for. Claims paid for the property and casualty sector decreased by 94.9% from SAR (58.2 million) in 2020G to SAR (3.0 million) in
2021G. The high value during 2020G was related to the Company paying a high value claim to one of its main customers related to property
accident insurance (there were no similar claims and payments during 2020G). After that, paid claims recorded an increase of 336.6% and
amounted to SAR (12.9 million) in 2022G when high value claims associated with another real estate insurance policy for “Arkaz” were
reported, which resulted in in an increase in claims compared to 2021G.

Reinsurers Share of Claims Paid

Reinsurers’ share of paid claims is determined by the reinsurance agreement for each of the Company’s insurance sectors. Regarding reinsurers’
total share of paid claims, the balance decreased significantly by 80.4%, or SAR (68.6 million), and dropped from SAR (85.4 million) in 2020G
to SAR (16.8 million) in 2021G. Then it increased by 37.6% and reached SAR (23.1 million) in 2022G.

Medical Sector
Reinsurers’ share of claims paid in the medical sector decreased by 53.9% from SAR (27.6 million) in 2020G to SAR (12.7 million) in 2021G,
with an additional decrease of 27.7% to reach SAR (9.2 million) in 2022G. This gradual decline was affected by the aforementioned decrease
in the total volume of claims paid in the medical sector between the years 2021G and 2022G.

Vehicle Sector
Reinsurers’ share of claims paid in the vehicle sector increased by 595.0% from SAR (0.3 million) in 2020G to SAR (1.9 million) in 2021G,
with an additional rise to SAR (2.7 million) in 2022G. This successive rise was mainly influenced by the increase mentioned in the total claims
made in the same sector as previously mentioned.

Property and Casualty Sector

The property and casualty sector accounted for the largest proportion of reinsurers’ share of paid claims, as it represented 56.6% of the total
reinsurers’ share of claims paid during the period between 2020G and 2022G.

Reinsurer’s share of claims paid within the property and casualty sector decreased by 96.3% from SAR (57.7 million) in 2020G to SAR (2.1
million) in 2021G due to a high value claim paid to a major customer in 2020G. An increase of 423.6% was recorded from SAR (2.1 million)
in 2021G to SAR (11.2 million) in 2022G, as a result of the claim paid regarding the customer’s insurance policy (Arkaz).

78
5.4.2.1.7 Net Claims and Other Benefits Incurred
The following table presents details of net claims and other benefits incurred for the fiscal years ending on December 31, 2020G, 2021G, and
2022G.

Table No. (32): Net Claims and Other Benefits Incurred

Fiscal Year Ended December 31 Increase/(Decrease) CAGR

Thousands Saudi Riyals
2020G 2021G 2022G December December
(2020G-2022G)
(Audited) (Audited) (Audited) 2021G 2022G

Medical (352,270) (142,621) (118,518) (59.5%) (16.9%) (42.0%)

Vehicle/ Motor (66,827) (177,602) (274,661) 165.8% 54.6% 102.7%

Property and Casualty (2,696) (2,102) 1,262 (22.0%) (160.0%) NA

Total (421,794) (322,325) (391,917) (23.6%) 21.6% (3.6%)

Loss Ratio: Net claims and Other Benefits Incurred/Net Premiums Earned

Medical (128.0%) (96.9%) (63.0%)

Vehicle/ Motor (68.8%) (114.5%) (128.0%)

Property and Casualty (53.8%) (51.8%) 18.6%

Total (111.8%) (105.2%) (95.7%)

Source: Audited Financial Statements for the Financial Years ending on December 31, 2020G, 2021G and 2022G.

Total net claims and other benefits incurred decreased by 23.6%, from SAR (421.8 million) in 2020G to SAR (322.3 million) in 2021G. Then
the balance increased by 21.6% and reached SAR (391.9 million) in 2022G.

Medical Sector
Total net claims and other benefits incurred in the medical sector decreased by 59.5% from SAR (352.3 million) in 2020G to SAR (142.6
million) in 2021G, with an additional decrease of 16.9% to attain SAR (118.5 million) in 2022G. This successive decline resulted from a
decrease in loss rate from 128.0% in 2020G to 96.9% and 63.0% in 2021G and 2022G, respectively, as a result of new supervisory decisions
taken by the Company, including changing the third administrative party in order to control the management and tracking of claims more
accurately.

Vehicle Sector
The net loss rate for the vehicle sector increased from 68.8% in 2020G to 114.5% in 2021G, with an additional increase to 128.0% in 2022G, as
the value of net claims increased by 165.8% from SAR (66.8 million) in 2020G to SAR (177.6 million) in 2021G, with an additional increase
of 54.6% to SAR (274.7 million) in 2022G, after the company incurred noticeable losses following the expansion that occurred in insurance
policies subscribed for through electronics insurance brokers during 2021G.

Property and Casualty Sector

The net loss rate for the property and casualty sector decreased from 53.8% in 2020G to 51.8% in 2021G. Then the sector recorded a negative
net loss rate of 18.6% in 2022G, due to the Company reversing some of the reserves in this sector, which led to an improvement in the loss ratio.

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5.4.2.1.8 Policy Acquisition Costs
The following table presents details of policy acquisition costs for the fiscal years ending on December 31, 2020G, 2021G, and 2022G.

Table No. (33): Policy Acquisition Costs

Fiscal Year Ended December 31 Increase/(Decrease) CAGR

Thousands Saudi Riyals
2020G 2021G 2022G December December
(2020G-2022G)
(Audited) (Audited) (Audited) 2021G 2022G

Medical (16,772) (8,516) (8,833) (49.2%) 3.7% (27.4%)

Vehicle/ Motor (3,419) (7,225) (13,573) 111.3% 87.9% 99.3%

Property and Casualty (3,154) (3,945) (5,665) 25.1% 43.6% 34.0%

Total (23,345) (19,686) (28,072) (15.7%) 42.6% 9.7%

Costs of Insurance Policies Paid/Total Written Premiums

Medical (8.0%) (5.6%) (3.8%)

Vehicle/ Motor (2.8%) (3.1%) (7.1%)

Property and Casualty (6.9%) (7.5%) (10.9%)

Total (6.2%) (4.5%) (5.9%)

Source: Audited Financial Statements for the Financial Years ending on December 31, 2020G, 2021G and 2022G.

Costs of acquiring insurance policies are mainly related to commissions paid to sales representatives, brokers, intermediaries, and agents,
in addition to expenses related to Najm Company. The movement of these costs is consistent with the movement in the total insurance
premiums written. The costs of acquiring insurance policies were concentrated in the medical and vehicle insurance sectors, as insurance
policies constituted 86.5%, 80.0%, and 79.8% of the total costs of acquiring insurance policies in 2020G, 2021G, and 2022G, respectively.

Medical Sector
Costs of acquiring medical insurance policies decreased by 49.2%, or SAR (8.3 million), from SAR (16.8 million) in 2020G to SAR (8.5
million) in 2021G, they later on recorded a slight increase of 3.7%, or a value of SAR (0.3 million) in 2022G. The decrease in 2021G was
mainly associated with a noticeable decrease in the volume of total written insurance premiums for the medical sector which decreased by
27.5% from SAR (209.5 million) in 2020G to SAR (151.9 million) in 2021G.

Vehicle Sector
Policy acquisition costs related to the vehicle sector increased by 111.3%, or a value of SAR (3.8 million), from SAR (3.4 million) in 2020G to
SAR (7.2 million) in 2021G, with an additional increase of 87.9%, or a value of SAR (6.3 million), to reach SAR (13.6 million) in 2022G. The
successive rise was affected by an increase in the business volume in general. In 2022G, costs increased significantly as the Company reduced
the business volume in the comprehensive vehicle sector, which is characterized by a commission rate of 2.0%, in exchange for a high business
volume in the “Third Party Liability” vehicle sector, which is characterized by a commission rate of 15.0% and led to an increase in those costs.

Property and Casualty Sector

Policy acquisition costs related to the property and casualty sector increased by 25.1%, or a value of SAR (0.8 million), from SAR (3.2 million)
in 2020G, to SAR (3.9 million) in 2021G, with an additional increase of 43.6% to SAR (5.7 million) in 2022G. The Company was obtaining
insurance policies in the property and casualty sector from related parties without paying any commissions for those policies. However, the
Company obtained insurance policies from new parties in late 2021G and 2022G, which led to an increase in those costs.

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5.4.2.1.9 Other Underwriting Expenses
The following table presents details of other underwriting expenses for the fiscal years ending on December 31, 2020G, 2021G, and 2022G.

Table No. (34): Other Underwriting Expenses

Fiscal Year Ended December 31 Increase/(Decrease) CAGR

Thousands Saudi Riyals
2020G 2021G 2022G December December
(2020G-2022G)
(Audited) (Audited) (Audited) 2021G 2022G

Supervision and Inspection Fees 5,128 3,395 4,402 (33.8%) 29.7% (7.3%)

Customer Inquiry Fees 3,898 5,244 4,007 34.5% (23.6%) 1.4%

Other 593 1,876 415 216.2% (77.9%) (16.4%)

Total 9,620 10,514 8,824 9.3% (16.1%) (4.2%)

Source: Audited Financial Statements for the Financial Years ending on December 31, 2020G, 2021G and 2022G.

Supervision and Inspection Fees

Supervision and inspection fees represent expenses paid to the regulatory authorities, namely the Saudi Central Bank, at a rate of 0.5% of the
total subscribed insurance premiums, net of local reinsurance obligations, in addition to the fees paid to the Council of Health Insurance at a
rate of 1.0% of the total subscribed insurance premiums in the medical sector.

Supervision and inspection fees decreased by 33.8%, or a value of SAR (1.7 million), from SAR (5.1 million) in 2020G to SAR (3.4 million)
in 2021G. These fees increased by 29.7%, or a value of SAR (1.0 million) to reach SAR (4.4 million) in 2022G. This volatility is mainly due to
a decrease in the total insurance revenues written in the medical sector during 2021G, its later increase in 2022G. These expenses are affected
by the movement of revenues during the normal course of business.

Customer Inquiry Fees

Customer inquiry fees represent expenses related to the fees payable to Elm Information Security Company for inquiries about the insured.
These expenses are directly related to the business volume. These expenses increased by 34.5% from SAR (3.9 million) in 2020G to SAR (5.2
million) in 2021G, as a result of the increase in insurance premiums written mainly within the retail sector, which in turn usually records a
higher number of inquiries compared to other sectors. Then these fees decreased by 23.6%, or by SAR (1.2 million) to reach SAR (4.0 million)
in 2022G, as a result of the decrease in insurance premiums subscribed to (specifically the retail sector) compared to the increase in the level of
business in the corporate sector. Thus, the cost related to inquiries about the insured decreased which explains the decline in customer inquiry
fees in general.

Other
Other expenses mainly included expenses related to the pre-survey stage for customers issuing new insurance policies, in addition to expenses
related to the vehicle sector, which are disbursed to electronic insurance brokers and related to the issuance of new insurance policies to
individuals. Other expenses increased by 216.2% from SAR (0.6 million) in 2020G to SAR (1.9 million) in 2021G, as a result of an increase
in the volume of business during the year, as total insurance premiums for the vehicle sector witnessed an increase of 88.6% in 2021G. Then,
other expenses recorded a decrease of 77.9% and accounted for SAR (0.4 million) in 2022G due to a decline in the volume of the vehicle sector
business.

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5.4.2.1.10 General and Administrative Expenses
The following table presents details of general and administrative expenses for the fiscal years ending on December 31, 2020G, 2021G, and
2022G.

Table No. (35): General and Administrative Expenses

Fiscal Year Ended December 31 Increase/(Decrease) CAGR

Thousands Saudi Riyals
2020G 2021G 2022G December December
(2020G-2022G)
(Audited) (Audited) (Audited) 2021G 2022G

Employees Expenses 41,052 45,285 46,258 10.3% 2.1% 6.2%

Professional Expenses 4,194 4,578 8,181 9.1% 78.7% 39.7%

Repair and Maintenance 2,420 3,163 3,821 30.7% 20.8% 25.7%

Depreciation and Amortization 2,980 1,368 3,579 (54.1%) 161.6% 9.6%

Board Members Remuneration and Attendance Allowances 3,817 3,931 3,268 3.0% (16.9%) (7.5%)

Employees End of Service Benefits - 2,026 2,125 N/A 4.9% N/A

Bank Expenses 2,473 3,614 1,985 46.2% (45.1%) (10.4%)

Benefits (Utility Expenses) 1,903 1,296 1,935 (31.9%) 49.3% 0.8%

Depreciation of Right-of-use Assets 1,212 2,313 1,821 90.9% (21.3%) 22.6%

Communication 498 814 1,725 63.6% 111.8% 86.1%

Lease 671 788 1,393 17.5% 76.8% 44.1%

Business Trips and Transport 2,682 907 1,026 (66.2%) 13.1% (38.1%)

Storage 1,096 669 466 (38.9%) (30.4%) (34.8%)

Stationery 1,160 223 240 (80.7%) 7.5% (54.5%)

Promotion and Advertising 185 343 46 85.9% (86.7%) (50.2%)

Fees and Subscriptions 329 371 428 12.7% 15.3% 14.0%

Other Expenses 2,711 3,795 2,583 40.0% (32.0%) (2.4%)

Total 69,381 75,486 80,878 8.8% 7.1% 8.0%

Percentage of Total

Employees Expenses 59.2% 60.0% 57.2%

Professional Expenses 6.0% 6.1% 10.1%

Repair and Maintenance 3.5% 4.2% 4.7%

Depreciation and Amortization 4.3% 1.8% 4.4%

Board Members Remuneration and Attendance Allowances 5.5% 5.2% 4.0%

Other Expenses 21.5% 22.7% 19.5%

General and Administrative Expenses 100.0% 100.0% 100.0%

Source: Audited Financial Statements for the Financial Years ending on December 31, 2020G, 2021G and 2022G.

Employees Expenses
Employees’ expenses represent the main component of general and administrative expenses, as they constituted 59.2%, 60.0%, and 57.2% of
the total general and administrative expenses in the years 2020G, 2021G, and 2022G, respectively.

Employees’ expenses mainly consist of the basic salary, housing and transportation allowances, in addition to bonuses, benefits, contributions
from the GOSI, and others. These SAR (41.1 million) in 2020G to SAR (45.3 million) in 2021G, with an additional increase of 2.1% to reach
SAR (46.3 million) in 2022G. The continuing rise mainly resulted from the growing number of employees, as their average number was 250
employees in 2022G, compared to 274 and 264 employees during the years 2021G and 2022G, respectively, due to appointments that included
key positions and an annual increase in employees’ salaries and annual incentives.

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Professional Expenses
Professional expenses mainly include payments for the Company’s external auditors. Professional fees increased by 9.1%, or SAR (0.4
million), from SAR (4.2 million) in 2020G to SAR (4.6 million) in 2021G, with an additional increase of 78.7%, or SAR (3.6 million), to SAR
(8.2 million) in 2022G. This successive increase, specifically in 2022G, was affected by the incurrence of non-recurring expenses amounting
to SAR (3.5 million) related to the implementation of IFRS 17.

Repair and Maintenance

Repair and maintenance expenses consist of office maintenance expenses and fees related to the IT department and subscriptions. Repair
and maintenance expenses increased by 30.7% from SAR (2.4 million) in 2020G to SAR (3.2 million) in 2021G, with an additional increase
of 20.8% to reach SAR (3.8 million) in 2022G. The aforementioned increases were driven by a rise in the cost of IT software licenses and
maintenance, which escalated compared to 2020G. It should be noted that these expenses fluctuate periodically, as they are affected by the
scope and number of maintenance and repair operations.

Depreciation and Amortization

Depreciation and amortization expenses generally relate to the depreciation of the Company’s property and equipment. These expenses
decreased by 54.1% from SAR (3.0 million) in 2020G to SAR (1.4 million) in 2021G, they then increased by 161.6%, or SAR (2.2 million to
reach SAR (3.6 million) in 2022G. The movement of these expenses is usually related to the movement of additions and sales of fixed assets
during the aforementioned years, which are mainly concentrated in furniture, fixtures, and improvements to rented spaces and computers.

Board Members Remuneration and Attendance Allowances

With regard to remuneration for Board Members, the company’s policy stipulates that the annual remuneration for the Chairman and Directors
shall be equal to a minimum of SAR (0.4 million) and a maximum of SAR (0.5 million) in exchange for their membership in the BOD and their
participation in its work, including additional remuneration if a member participates in any of the committees emanating from the Board, as in
all cases, it does not exceed the total remuneration received by a Board member of financial or in-kind benefits amounting to SAR (0.5 million).
On the other hand, with regard to the allowances for attending Board meetings, the policy stipulates that the maximum limit for attending
Board and Committee sessions is SAR (5,000) for each session, not including travel expenses and residence. These expenses did not witness a
fundamental change between 2020G and 2021G. Later on, a decrease of 16.9%, or SAR (0.6 million) was recorded to reach SAR (3.3 million)
in 2022G. It should be noted that these expenses fluctuate constantly with the change in the number of Board Members, Committee meetings,
and the amount of remuneration, which may also vary depending on the results achieved.

Employees End-of-service Benefits

These expenses include end-of-service payments that are calculated through actuarial studies conducted annually. They remained almost
constant between 2021G and 2022G.

Bank Expenses
Banking expenses are related to the Company’s daily operations of deposits and withdrawals. They increased by 46.2% from SAR (2.5 million)
in 2020G to SAR (3.6 million) in 2021G, and then decreased to SAR (2.0 million) in 2022G. These expenses fluctuate periodically and do not
follow a specific trend.

Benefits (Utility Expenses)

Utility expenses are water and electricity expenses related to the Company’s administrative offices and point-of-sale buildings. These expenses
fluctuate periodically within the normal course of business.

Depreciation of the Right-of-use Assets

Depreciation expenses are related to assets that the Company has acquired under capital leases. As it was pointed out previously, these assets
mainly include offices, main buildings, in addition to point-of-sale buildings. These expenses increased significantly by 90.9% from SAR (1.2
million) in 2020G to SAR (2.3 million) in 2021G. They then decreased by 21.3% to reach SAR (1.8 million) in 2022G. These expenses are
usually affected by the movement of increase and sales associated with the assets mentioned.

Communication
Communication expenses are general utility expenses that fluctuate within the normal course of business. These expenses gradually increased
from SAR (0.5 million) in 2020G to SAR (1.7 million) in 2022G. The Company has improved some Internet services and subscriptions to
enhance the performance and speed of the Internet service.

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Business Trips and Transportation
Business travel and transportation expenses are the accommodation and transportation expenses incurred by the Company during employees’
business trips. These expenses decreased by 66.2% from SAR (2.7 million) in 2020G to SAR (0.9 million) in 2021G and SAR (1.0 million)
in 2022G. It should be noted that these expenses fluctuate constantly, as they do not follow a specific trend, but are generally affected by the
number and duration of business trips.

Stationery
Stationery expenses are part of administrative expenses incurred in offices. These expenses decreased by 80.7% from SAR (1.2 million) in
2020G to SAR (0.2 million) in 2022G. They fluctuate periodically.

Fees and Subscriptions

Fees and subscriptions expenses are related to the Company’s subscriptions to some government agencies. These expenses did not witness any
fundamental change between the years 2020G and 2022G.

Other Expenses
Other expenses include expenses related to SIMA subscriptions, cleaning, and expenses related to deduction and addition taxes, and other
miscellaneous expenses. These expenses fluctuate periodically.

5.4.2.1.11 Investment and Commission Income

As previously noted, investment and commission income mainly includes commission income on deposits and debt instruments, dividends
from investment funds, in addition to profits/(losses) from the sale of available-for-sale investments, less any impairment charge on available-
for-sale investments. The aforementioned revenues decreased by 51.4%, or SAR (6.4 million), from SAR (12.5 million) in 2020G to SAR
(6.1 million) in 2021G, with an additional decrease of 46.3% to SAR (3.3 million) in 2022G. This income fluctuates as dividend pay-out ratio
(DPR) fluctuates.

5.4.2.1.12 Change in the Fair Value of Financial Assets at Fair Value Through Profit or Loss (FVTPL)
As mentioned previously, the fair value of financial assets at FVTPL is primarily related to available-for-sale investments and financial assets at
fair value. It should be noted that the change in the value of these investments fluctuates continuously and is linked to the evaluation and value
review process, which is conducted annually.

5.4.2.1.13 Profits Realized from Available-for-sale Investments

As already indicated that these profits achieved from available-for-sale investments are obtained from excluding available-for-sale investments
that are sold by the Company. These profits do not follow a specific trend, but rather fluctuate constantly with the size of the portfolio of
investments sold.

5.4.2.1.14 Refund of Accumulated Surplus Due

In accordance with Article No. (35) of the Saudi Central Bank policy for distributing surplus, the Company reacquired the outstanding unclaimed
surplus amounting to SAR (9.2 million), SAR (16.0 million), and SAR (0.7 million) in 2020G, 2021G and 2022G. The refund of the surplus
due represents the refund of the unclaimed surplus calculated at 10.0% of the policyholders’ net profit. According to the approved surplus
distribution policy, this profit can be returned in the income statement if it remains unclaimed after five years from the date of distribution. In
light of this, the unclaimed surplus for the years 2015G, 2016G, and 2017G, which amounted to SAR (9.2 million), SAR (16.0 million), and
SAR (0.7 million) was refunded during the years 2020G, 2021G and 2022G, respectively.

5.4.2.1.15 Financial Costs of Lease Contracts Obligation

The financial costs of lease contracts are related to assets acquired by the Company under capital lease contracts, which mainly include offices,
buildings, and points of sale. These costs did not witness any noticeable change between 2021G and 2022G.

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5.4.2.1.16 Other Income
Other income consists of several components, which mainly include income from the Umrah product related to medical insurance, general
insurance, and accident insurance, under an agreement signed with 28 other insurance companies. The compulsory Umrah product is provided
by the Ministry of Hajj and Umrah and approved by the Saudi Central Bank for insurance for pilgrims coming from outside the Kingdom of
Saudi Arabia, with the exception of citizens of Gulf Cooperation Council countries. This insurance covers general accidents and health benefits
for pilgrims entering the KSA to perform Umrah and Hajj.

Other income decreased by 52.0%, or SAR (2.7 million), from SAR (5.1 million) in 2020G to SAR (2.5 million) in 2021G, as a result of the
restrictions imposed during the spread of the COVID-19 pandemic by the Ministry of Health in the KSA. Other income increased by 661.5%,
or SAR (16.3 million) to reach SAR (18.7 million) in 2022G after restrictions were lifted.

5.4.2.1.17 Zakat Provision

The Company received final Zakat assessments from 2012G to 2018G during 2020G, and the total additional Zakat provision according
to assessments amounted to SAR (36.3 million) for these aforementioned years. The Company submitted an appeal to the Saudi General
Secretariat of Zakat, Tax, and Customs Committees (GSZTCC) against these assessments, and a settlement request to the Settlement Committee
of the Zakat, Tax and Customs Authority (ZATCA). During 2021G, the Committee offered to reduce the Zakat assessment to an amount of
SAR (36.2 million), which the Company did not accept, and accordingly, it continued the appeal submitted to the General Secretariat of Zakat
Committees (Supreme Committees), which issued the decision. The final additional Zakat provision was assessed at SAR (36.2 million). The
Company resubmitted an appeal to the Appeal Committee to resolve tax disputes against this assessment.

During 2021G, the Company received an initial assessment from the ZATCA for the years between 2019G and 2020G, with an additional
obligation of SAR (9.6 million) and submitted an objection to the General Secretariat of Zakat, Tax and Customs Committees (GSTCC) against
this assessment.

The Company believes that the Authority will reconsider the assessment and allow a certain deduction from the Zakat base, and that the current
value of Zakat provision maintained by the Company is sufficient to cover the uncertain Zakat provision.

Total Comprehensive Loss for the Year

In terms of overall profit (or loss), it mainly included income from profit on remeasurement of employee benefit obligations and the net change
in the fair value of available-for-sale investments. Regarding profit (or loss) associated with employee benefit obligations (end-of-service
obligation) which are measured by an actuary at the end of each year, reported profits (or losses) fluctuate constantly and are affected by
assumptions used in actuarial studies.

On the other hand, in relation to changes in the fair value of available-for-sale investments, as it was pointed out previously, these profits and
losses are related to investments recorded by the Company, the value of which is periodically evaluated.

Comprehensive loss decreased from SAR (107.7 million) in 2020G to SAR (74.5 million) in 2021G as a result of a drop in the net underwriting
loss, from SAR (71.9 million) to SAR (42.6 million) between the two years after the overall net loss rate declined and the profits realized from
available-for-sale investments and accrued accumulated surplus increased.

The value of the comprehensive loss increased from SAR (74.5 million) in 2021G to SAR (83.0 million) in 2022G, after an increase recorded
in general and administrative expenses, and in losses resulting from the net change in the fair value of available-for-sale investments, which
rose from SAR (1.1 million) in 2021G, to reach SAR (11.0 million) in 2022G.

85
5.5 Statement of Financial Position
The following table presents details of the statement of financial position for the fiscal years ending on December 31, 2020G, 2021G, and
2022G.

Table No. (36): Statement of Financial Position

Fiscal Year Ended December 31 Increase/(Decrease) CAGR

Thousands Saudi Riyals
2020G 2021G 2022G December December
(2020G-2022G)
(Audited) (Audited) (Audited) 2021G 2022G

Assets

Cash and cash equivalents 343,337 288,218 222,967 (16.1%) (22.6%) (19.4%)

Term Deposits 86,250 86,250 127,000 - 47.2% 21.3%

Insurance premiums and balance receivables 63,839 94,626 105,209 48.2% 11.2% 28.4%

Reinsurers’ share of unearned insurance premiums 18,949 27,492 28,071 45.1% 2.1% 21.7%

Reinsurers share of outstanding claims 26,902 35,353 13,520 31.4% (61.8%) (29.1%)

Reinsurers share of claims incurred but not reported 12,002 7,335 1,713 (38.9%) (76.7%) (62.2%)

Deferred policy acquisition costs 9,025 12,522 15,304 38.7% 22.2% 30.2%

Total 560,304 551,796 513,784 (1.5%) (6.9%) (4.2%)

Investments:

Financial assets at FVTPL 100,465 57,192 20,893 (43.1%) (63.5%) (54.4%)

Available-for-sale Investments 44,085 30,567 31,385 (30.7%) 2.7% (15.6%)

Prepaid expenses and other assets 22,213 27,537 33,551 24.0% 21.8% 22.9%

Property and equipment 3,984 5,210 5,248 30.8% 0.7% 14.8%

Right-of-use asset - 4,405 2,687 NA (%39.0) NA

Intangible assets 1,863 5,721 6,053 207.1% 5.8% 80.3%

Goodwill 25,514 25,514 25,514 - - -

Statutory deposit 40,000 40,000 21,000 - (47.5%) (27.5%)

Revenues due on a statutory deposit 5,574 5,841 6,026 4.8% 3.2% 4.0%

Total 243,697 201,986 152,357 (17.1%) (24.6%) (20.9%)

Total assets 804,001 753,782 666,141 (6.2%) (11.6%) (9.0%)

Liabilities

Creditors 7,792 5,855 4,101 (24.9%) (30.0%) (27.5%)

Accrued expenses and other liabilities 29,921 32,321 48,376 8.0% 49.7% 27.2%

Reinsurance credits 2,702 17,935 20,239 563.7% 12.8% 173.7%

Unearned insurance premiums 171,429 246,505 247,419 43.8% 0.4% 20.1%

Unearned reinsurance commission 3,195 2,776 3,244 (13.1%) 16.9% 0.8%

Outstanding claims 106,553 73,836 53,992 (30.7%) (26.9%) (28.8%)

Claims incurred but not reported 76,121 57,758 48,874 (24.1%) (15.4%) (19.9%)

Additional insurance premiums reserves 14,025 16,210 25,972 15.6% 60.2% 36.1%

Other technical reserves 6,129 5,134 4,291 (6.2%) (16.4%) (16.3%)

Lease contracts obligation - 3,806 2,617 NA (31.2%) NA

86
 Fiscal Year Ended December 31 Increase/(Decrease) CAGR
Thousands Saudi Riyals
2020G 2021G 2022G December December
(2020G-2022G)
(Audited) (Audited) (Audited) 2021G 2022G

Due to related parties 1,124 1,124 1,124 - - -

Employee benefits obligations 9,207 9,204 8,032 (0.0%) (12.7%) (6.6%)

Zakat due 46,858 42,652 42,654 (9.0%) 0.0% (3.6%)

Commission income payable to the Saudi Central Bank 5,574 5,841 6,026 4.8% 3.2% 4.0%

Dividends payable 371 370 370 (0.1%) - (0.1%)

Accrued accumulated surplus 35,219 19,177 18,486 (45.5%) (3.6%) (%27.6)

Total liabilities 516,219 540,505 535,817 4.7% (0.9%) 1.9%

Property rights

Paid-up Capital 400,000 400,000 140,000 - (65.0%) (40.8%)

Accumulated losses (122,572) (197,043) (10,539) 60.8% (94.7%) (70.7%)

Reserve for remeasurement of employee benefits 2,297 3,375 4,925 47.0% 45.9% 46.4%

Investments’ fair value reserve 8,058 6,945 (4,061) (13.8%) (158.5%) NA

Net equity 287,782 213,277 130,325 (25.9%) (38.9%) (32.7%)

Total liabilities and equity 804,001 753,782 666,141 (6.2%) (11.6%) (9.0%)
Source: Audited Financial Statements for the Financial Years ending on December 31, 2020G, 2021G and 2022G.

The Company’s assets are mainly concentrated in cash, cash equivalents, and term deposits, with these two components representing 53.4%,
49.7%, and 52.5% of total assets as of December 31, 2020G, December 31, 2021G, and December 31, 2022G, respectively. Cash and cash
equivalents consist primarily of cash at banks, cash in hand, time deposits and money market fund deposits. On the other hand, long-term
deposits represent deposits placed in local banks and financial institutions with an original maturity greater than three months but less than or
equal to twelve months from the date of deposit.

The asset balance fluctuated between December 31, 2020G and December 31, 2022G. The balance of assets decreased by 6.2%, or SAR
(50.2 million), from SAR (804.0 million), as of December 31, 2020G, to SAR (753.8 million), as of December 31, 2021G, with an additional
decrease of 11.6%, or by SAR (87.6 million), to SAR (666.1 million). As of December 31, 2022G. The decline between December 31, 2020G
and December 31, 2021G was mainly affected by the decline in the balances of cash and cash equivalents, financial assets at FVTPL and long-
term deposits. Regarding the additional decline recorded in the total balance of assets as of December 31, 2022G, it was also influenced by an
additional drop recorded in the balances of cash and cash equivalents and financial assets at FVTPL.

Regarding the Company’s liabilities, they are considered to be concentrated in unearned insurance premiums, outstanding claims and claims
incurred but not reported. The three components represented 68.6%, 70.0% and 65.4% of the total liabilities as of December 31, 2020G,
December 31, 2021G, and December 31, 2022G, respectively. As for unearned premiums, they represent the share of written premiums related
to the period of coverage in effect. On the other hand, outstanding claims represent claims under settlement, and incurred claims include claims
that were disbursed during the period/year. At the level of movement in the total balance of liabilities, the balance recorded an increase of 4.7%,
or a value of SAR (24.3 million), from SAR (516.2 million) as of December 31, 2020G to SAR (540.5 million) as of December 31, 2021G,
then a slight decrease of 0.9% or a value of SAR (4.7 million) was recorded as of December 31, 2022G. Whereas the increase as of December
31, 2021G was driven by a rise in reinsurance payable balances and unearned insurance premiums, the subsequent decrease was affected by a
decline in the balance of outstanding claims during the aforementioned period.

In terms of equity, it mainly included capital and accumulated losses. Regarding capital, the Company’s paid-up capital amounted to SAR
(140.0 million) as of December 31, 2022G and consisted of (14.0 million) shares with a value of SAR (10) per share. It should be noted that
the Company’s capital amounted to SAR (400.0 million) between December 31, 2020G and December 31, 2021G, before it decreased to 1SAR
(40.0 million) as a result of the Company’s Shareholders’ Resolution to extinguish losses.

Concerning accumulated losses, the Company recorded an increase in the value of these losses by 60.8%, or SAR (74.5 million), from SAR
(122.6 million) as of December 31, 2020G to SAR (197.0 million) as of December 31, 2021G, as a result of the accumulation of losses between
the two aforementioned years. The balance then witnessed a slight improvement, as accumulated losses decreased by 94.7%, or SAR (186.5
million) and reached SAR (10.5 million), as of December 31, 2022G, after approving capital reduction in order to amortize losses.

In addition to the aforementioned components (capital and accumulated losses), equity includes reserve for remeasurement of employee
liabilities, and fair value reserve for investments. With reference to the employee liability remeasurement reserve, it is linked to the employee
liability and is measured by the actuary. On the other hand, investment fair value reserve relates to the various investments recorded by the
Company, which mainly consisted of financial assets at fair value and available-for-sale investments. Detailed information on all the aforesaid
items is set forth in the subsequent sections of this Prospectus.

87
5.5.1 Cash and Cash Equivalents
The following table presents details of cash and cash equivalents for the fiscal years ending December 31, 2020G, December 31, 2021G, and
December 31, 2022G.

Table No. (37): Cash and Cash Equivalents

Fiscal Year Ended December 31 Increase/(Decrease) CAGR

Thousands Saudi Riyals
2020G 2021G 2022G December December
(2020G-2022G)
(Audited) (Audited) (Audited) 2021G 2022G

Cash in hand 32 38 49 19.8% 29.2% 24.4%

Cash at banks 26,803 93,616 60,123 249.3% (35.8%) 49.8%

Term deposits 48,750 - 78,000 (100.0%) NA 26.5%

Money market fund 267,753 194,564 84,794 (27.3%) (56.4%) (43.7%)

Total 343,337 288,218 222,967 (16.1%) (22.6%) (19.4%)

Source: Audited Financial Statements for the Financial Years ending on December 31, 2020G, 2021G and 2022G.

As shown in the table above, cash and cash equivalents consist of several components including cash in hand, cash at banks, time deposits and
money market fund balance.

With regard to cash in hand, it represents low-value balances placed in the custody of employees in order to manage expenses and daily needs.
The company’s policy in this regard is to maintain a low value covenant that is renewed on a monthly basis. The cash balance in the fund
remained low throughout the period between December 31, 2020G and December 31, 2022G. Regarding cash at banks, it includes balances
deposited in the various banks with which the Company deals.

Time deposits are short-term in nature with an original maturity of less than three months. These deposits earn commission income at an
average rate ranging from 1.1% to 6.6% per year.

The money market fund balance is a balance deposited in the money market fund, which the Company has the right to liquidate within a period
of less than 90 days.

In terms of the total balance, the balance of cash and cash equivalents decreased by 16.1%, or SAR (55.1 million), from SAR (343.3 million) as
of December 31, 2020G, to SAR (288.2 million), as of December 31, 2021G, with an additional decrease of 22.6%, or SAR (65.3 million) as of
December 31, 2022G. The decrease was mainly impacted by the movement in net cash generated (or used) in investing or financing activities.

As for investment activities, the Company recorded a positive cash flow of SAR (248.5 million) in 2020G, which later decreased by 70.9%
or SAR (176.1 million) to reach SAR (72.4 million) in 2021G after liquidating short-term deposits worth SAR (170.1 million) during the
aforementioned year. Then, cash generated from investing activities recorded an additional decrease of 88.5%, or a value of SAR (64.0 million),
to SAR (8.4 million) in 2022G. The indicated additional decline was influenced by monetization and tying of short-term deposits.

On the other hand, with regard to financing activities, the Company recorded negative cash flows amounting to SAR (2.9 million) and SAR
(1.3 million) between 2021G and 2022G, as these negative flows were mainly associated with lease payments.

It is worth noting that the Company recorded negative cash flows from operating activities amounting to SAR (160.2 million), SAR (124.6
million), and SAR (72.3 million) in 2020G, 2021G, and 2022G, respectively. The decrease recorded between 2020G and 2021G is mainly due
to the decline in net losses and the increase in unearned insurance premium balances. As for the years 2021G and 2022G, the decline in negative
cash flows from operating activities was affected by an increase in insurance premiums and debit balances, and a decrease in the balance of the
reinsurer’s share of outstanding claims during the mentioned periods.

Term Deposits

As formerly stated, cash and cash equivalent balances included time deposits with a maturity of less than three months. In the case of time
deposits, which are classified as a separate item, they are also financial deposits deposited with banks and local financial institutions, but with
a maturity of more than three months but less than or equal to twelve months from the date of deposit. It should be noted that these deposits
generate commission income at an average rate ranging from 1.1% to 6.6% annually.

These deposits are classified under the loans and receivables category of financial assets and are carried at amortized cost. The balance of these
deposits was zero as of December 31, 2020G, then it increased and reached SAR (86.3 million) as of December 31, 2021G, with an additional
increase of 47.2%, or a value of SAR (40.8 million) as of December 31, 2022G. The ongoing increase was driven by the Company’s decision to
include some high-value proceeds within the short-term deposits item due to expectations of an increase in return and interest rates associated
with the aforementioned deposits item.

88
5.5.2 Insurance Premiums and Balance Receivables
The following table shows details of insurance premiums and balance receivables for the fiscal years ending on December 31, 2020G, December
31, 2021G, and December 31, 2022G.

Table No. (38): Insurance Premiums and Balance Receivables

Fiscal Year Ended December 31 Increase/(Decrease) CAGR

Thousands Saudi Riyals
2020G 2021G 2022G December December
(2020G-2022G)
(Audited) (Audited) (Audited) 2021G 2022G

Insurance premiums receivable 68,918 123,845 135,358 79.7% 9.3% 40.1%

Insurance premiums receivable from related parties 11,480 8,934 - (22.2%) (100.0%) (100.0%)

Receivable balances due from insurance and reinsurance

19,716 1,332 8,308 (93.2%) 523.8% (35.1%)
companies

Sum 100,114 134,110 143,666 34.0% 7.1% 19.8%

Provision for doubtful debts:

Insurance premiums receivable (33,305) (35,222) (37,855) 5.8% 7.5% 6.6%

Insurance premiums receivable from related parties (2,324) (3,737) - 60.8% (100.0%) (100.0%)

Receivable balances due from insurance and reinsurance

(646) (526) (602) 18.6% 14.4% (3.5%)
companies

Sum (36,275) (39,485) (38,457) 8.8% (2.6%) 3.0%

Total 63,839 94,626 105,209 48.2% 11.2% 28.4%

Source: Audited Financial Statements for the Financial Years ending on December 31, 2020G, 2021G and 2022G.

Premiums’ receivable is stated at gross written premiums receivable from insurance contracts, less an allowance for any uncollectible amounts.
Premiums and reinsurance balances receivable are recognized when due and measured on initial recognition at the fair value of the consideration
received or receivable. The carrying value of receivable is reviewed for impairment and whenever events or circumstances indicate that the
carrying amount may not be recoverable, the impairment loss is recorded as “Allowance for Impairment of Doubtful Debts” in the income
statement. Receivable balances are derecognized when the Company no longer controls the contractual rights that comprise the receivable
balance, which is normally the case when the receivable balance is sold, or all the cash flows attributable to the balance are passed through to
an independent third party. It should be noted that insurance premiums receivable generally included three components: premiums’ receivable,
premiums’ receivable due from related parties, and balances receivable due from insurance and reinsurance companies.

Premiums’ receivable includes balances receivable from customers (private and other companies).

Insurance premiums due from related parties represent receivable balances from sister companies that obtain the Company’s insurance services.

Balances receivable from insurance and reinsurance companies are balances receivable from reinsurers.

Total premiums and insurance receivable balances increased by 34.0%, or SAR (34.0 million), from SAR (100.1 million) as of December 31,
2020G, to SAR (134.1 million), as of December 31, 2021G, with an additional increase of 7.1%, or SAR (9. 6 million) to SAR (143.7 million)
as of December 31, 2022G. The indicated increase in 2021G was affected by an increase in insurance premiums receivable by 79.7%, or by
SAR (54.9 million), from SAR (68.9 million) to SAR (123.8 million) between December 31, 2020G and December 31, 2021G. On the other
hand, the additional increase as of December 31, 2022G was driven by an increase in receivable balances due from insurance and reinsurance
companies by 523.8%, or by SAR (7.0 million), from SAR (1.3 million) to SAR (8.3 million) between December 31, 2021G and December
31, 2022G.

Regarding insurance premium balances receivable, the continuous increase in the balance (between December 31, 2020G and December 31,
2023G) was influenced by the rise in insurance premiums in general during the aforementioned period and the high level of activity with
institutions (companies) mainly.

It should be noted that the increase in insurance premiums receivable was offset by a decrease in insurance premiums receivable due from
related parties, and a fluctuation in the debit balance due from insurance and reinsurance companies. Concerning insurance premiums receivable
due from related parties, the balance decreased by 22.2%, or by SAR (2.5 million), from SAR (11.5 million) as of December 31, 2020G, to
SAR (8.9 million) as of December 31. 2021G, and a successive decrease to zero as of December 31, 2022G. Moreover, the largest part of
transactions with related parties were concluded with Abdul Rahman Ali Al Turki Group Company (ATCO), and the decrease in the balance
of insurance premiums receivable from related parties was affected after renewing a number of documents with ATCO in 2021G. However,
the aforementioned company was no longer a related party in 2022G, which led to the reclassification of debit balance into debit insurance
premiums category.

89
The debit balance due from insurance and reinsurance Companies fluctuated, and it decreased by 93.2%, or SAR (18.4 million), from SAR
(19.7 million) as of December 31, 2020G, to SAR (1.3 million), as of December 31, 2021G, given that the net surplus loss debit associated
with the medical insurance sector was higher than the surplus loss premium payments associated with the same sector, as a result of the high
volume of medical claims subject to the reinsurance agreement and surplus loss. Then the balance increased by 523.8% to SAR (8.3 million)
as of December 31, 2022G, driven by a decrease in collections for the surplus loss.

5.5.3 Provision for Doubtful Debts

Regarding the balance of the provision for doubtful debts, it was concentrated in the provision for insurance premiums receivable. The provision
associated with these installments increased by 7.5%, or SAR (2.6 million), from SAR (35.2 million) to SAR (37.9 million) between December
31, 2021G and December 31, 2022G. The increase in the provision was generally affected by the rise in the balance of insurance premiums
receivable for the reasons mentioned above.

The provision for doubtful debts and insurance premiums receivable included a provision of SAR (3.7 million) as of December 31, 2021G. The
aforementioned provision was mainly related to the significant increase in insurance receivable balances. As aforementioned, the increase in
the balance of insurance premiums receivable was concentrated in the balances of companies and institutions.

The aforementioned provision (total provision for doubtful debts) also included a provision related to debit balances due from insurance and
reinsurance companies amounting to SAR (0.5 million) and SAR (0.6 million) as of December 31, 2021G and December 31, 2022G.

5.5.4 Age of Insurance Premiums and Receivables

The following table presents details of the age of insurance premiums and receivable balances for the fiscal years ending on December 31,
2020G, December 31, 2021G, and December 31, 2022G.

Table No. (39): Age of Insurance Premiums and Receivables

Fiscal Year Ended December 31 Increase/(Decrease) CAGR

Thousands Saudi Riyals
2020G 2021G 2022G December December
(2020G-2022G)
(Audited) (Audited) (Audited) 2021G 2022G

Not past due and not impaired 30,483 65,502 81,424 114.9% 24.3% 63.4%

From 91 to 180 days 17,189 18,115 15,945 5.4% (12.0%) (3.7%)

From 181 to 360 days 14,597 8,509 6,655 (41.7%) (21.8%) (32.5%)

More than 360 days 37,845 41,985 39,643 10.9% (5.6%) 2.3%

Total 100,114 134,110 143,666 34.0% 7.1% 19.8%

Source: Audited Financial Statements for the Financial Years ending on December 31, 2020G, 2021G and 2022G.

With respect to the age of insurance premiums and receivables, the Company’s business terms generally require premiums to be settled in less
than 90 days. In addition, the Company offers installment payment methods which are based on the total premium amount.

In general, and as shown in the table above, the collection movement generally improved during the period between 2020G and 2022G, as
obsolete balances witnessed a relative decline during the aforementioned period. The overall improvement in the collection movement can
be attributed to the enhancement in the pace of collection from related parties and the connection of a large portion of the work and services
implemented to the retail sector, where collection is done in advance in most cases.

Based on previous experience, it is expected to collect the full non-impaired balances of insurance premiums receivable, balances receivable
from insurance and reinsurance companies, and premiums receivable from related parties, noting that the company doesn’t usually obtain
guarantees on these receivables, and therefore they are not guaranteed.

5.5.5 Reinsurers Share of Unearned Premiums

Reinsurers’ share of unearned insurance premiums is calculated on a proportional basis with the same mechanism for calculating unearned
insurance premiums. The reinsurer’s share of unearned insurance premiums coincides proportionately with his share of written premiums
according to the reinsurance agreements.

In terms of total balance, it gradually increased by 45.1%, or SAR (8.5 million), from SAR (18.9 million) as of December 31, 2020G to SAR
(27.5 million) as of December 31, 2021G, with a gradual increase by 2.1%, or a value of SAR (0.6 million), as of December 31, 2022G. The
indicated increase was generally in line with the rise in total insurance premiums receivable.

5.5.6 Reinsurers Share of Outstanding Claims

In relation to outstanding claims, they mainly include the total estimated cost of claims incurred but outstanding at the statement of financial
position date. As for the reinsurer’s share of outstanding claims, it is recognized similarly to the amounts related to insurance contracts in
accordance with the terms of the reinsurance agreements.

90
As for the total balance, it increased by 31.4%, or SAR (8.5 million), from SAR (26.9 million) as of December 31, 2020G to SAR (35.4 million)
as of December 31, 2021G, as a result of the increase in the value of claims related to the engineering sector, before it decreased again by
61.8%, or SAR (21.8 million) to reach SAR (13.5 million), as of December 31, 2022G, after a decline in balances of outstanding claims within
the engineering and general accidents sectors.

5.5.7 Reinsurers Share of Claims Incurred but Not Reported

According to the terms of the reinsurance agreements, amounts recoverable from reinsurers are recognized similarly to amounts relating to
insurance contracts.

The balance of reinsurers’ share of incurred but not reported claims witnessed a gradual decrease by 38.9%, or SAR (4.7 million), from SAR
(12.0 million) as of December 31, 2020G to SAR (7.3 million) as of December 31, 2021G with an additional decline of 76.7%, or a value of
SAR (5.6 million), as of December 31, 2022G. The aforementioned decline in 2021G was affected by the medical insurance sector. Regarding
the medical insurance sector, the balance of the reinsurers’ share of incurred but not reported claims decreased by SAR (2.9 million) between
December 31, 2020G and December 31, 2021G, with an additional drop of a similar amount between December 31, 2021G and December 31,
2022G.

On the other hand, the decrease in the balance of reinsurers’ share of claims incurred but not reported in 2022G was related to medical
insurance, motor insurance, marine insurance, and property insurance sectors, as the aforementioned sectors recorded successive declines in
the balances of claims and the balances of the reinsurers’ share of these claims.

5.5.8 Deferred Policy Acquisition Costs

The following table details the costs of acquiring deferred insurance policies for the fiscal years ending December 31, 2020G, December 31,
2021G, and December 31, 2022G.

Table No. (40): Deferred Policy Acquisition Costs

Fiscal Year Ended December 31 Increase/(Decrease) CAGR

Thousands Saudi Riyals
2020G 2021G 2022G December December
(2020G-2022G)
(Audited) (Audited) (Audited) 2021G 2022G

January 1 11,861 9,025 12,522 (23.9%) 38.7% 2.8%

Incurred during the year 20,510 23,182 30,853 13.0% 33.1% 22.7%

Amortized during the year (23,345) (19,686) (28,072) (15.7%) 42.6% 9.7%

December 31 9,025 12,522 15,304 38.7% 22.2% 30.2%

Source: Audited Financial Statements for the Financial Years ending on December 31, 2020G, 2021G and 2022G.

Deferred policy acquisition costs relate primarily to policy underwriting expenses, mainly representing commissions paid to intermediaries,
sales representatives, brokers, and agents. These costs are generally in line with movements in gross written premiums.

The value of deferred policy acquisition costs increased by 38.7%, or by SAR (3.5 million), from SAR (9.0 million) as of December 31, 2020G
to SAR (12.5 million) as of December 31, 2021G, with an additional increase of 22%. 2%, or a value of SAR (2.8 million) as of December 31,
2022G. This successive increase was in line with the rise in insurance premium balances between the aforementioned years.

5.5.9 Financial Assets at Fair Value Through Profit or Loss (FVTPL)

Investments generally consist of two components: financial assets at FVTPL and available-for-sale investments. The investments referred
to can be classified into more than one category. They include investments listed on the capital market and investments (not listed on the
mentioned market). They also include investments deposited in investment funds and other investments that include ordinary shares.

Investments listed on the capital market are trading market investments. As for investments not listed in the capital market, they include unlisted
stock investments and mutual funds.

At the component level, investments deposited in investment funds are investments in investment pools that collect the capital of a group of
investors and manage it according to a specific investment strategy and objectives set by the fund manager. On the other hand, common shares
are diversified investments.

Regarding the balance of financial assets at FVTPL, the value of these assets gradually decreased by 43.1%, or by SAR (43.3 million), from
SAR (100.5 million) as of December 31, 2020G, to SAR (57.2 million) as of December 31, 2021G, with an additional decrease of 63.5%, or a
value of SAR (36.3 million) as of December 31, 2022G. This decline was affected by the liquidation of a number of funds (a SAR (25.0 million)
fund in Franklin Templeton Investment Fund, a SAR (8.5 million) fund in Emirates NBD, and a SAR (6.8 million) fund in Vistra Capital).

At the level of investments available for sale, a similar and gradual decrease of 30.7%, or a value of SAR (13.5 million), was recorded from
SAR (44.1 million) as of December 31, 2020G to SAR (30.6 million) as of December 31, 2021G, as a result of selling and liquidating a number

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of investments. The balance then increased by 2.7%, or by SAR (0.8 million), as of December 31, 2022G, after the value of Najm Company’s
investments augmented.

It is worth noting that the Company has conducted a review of available-for-sale investments and financial assets at FVTPL to assess the extent
to which these investments are exposed to impairment. Based on certain information, management believes that there is no need to reduce the
value of these investments. All investments are registered in Saudi Riyals (SAR) and US Dollars.

5.5.10 Prepaid Expenses and Other Assets

The following table presents details of prepaid expenses and other assets for the fiscal years ending on December 31, 2020G, December 31,
2021G, and December 31, 2022G.

Table No. (41): Prepaid Expenses and Other Assets

Fiscal Year Ended December 31 Increase/(Decrease) CAGR

Thousands Saudi Riyals
2020G 2021G 2022G December December
(2020G-2022G)
(Audited) (Audited) (Audited) 2021G 2022G

Deferred supervision fees 3,814 13,858 6,726 263.3% (51.5%) 32.8%

Other expenses paid in advance 2,621 3,382 3,610 29.0% 6.7% 17.4%

Amounts receivable from the Arab War Risk Insurance Fund

2,548 2,561 2,572 0.5% 0.5% 0.5%
(AWRIS)

VAT refunded 5,240 1,457 2,289 (72.2%) 57.1% (33.9%)

Employees accounts receivable 875 1,235 1,327 41.0% 7.4% 23.1%

Amounts receivable from the Manafeth Fund 817 883 11 8.1% (98.7%) (88.2%)

Receivables from Umrah Fund 4,444 191 13,878 (95.7%) 7,151.8% 76.7%

Accrued income 718 1,646 1,470 129.1% (10.6%) 43.1%

Other 1,134 2,324 1,668 104.9% (28.2%) 21.3%

Total 22,213 27,537 33,551 %24.0 21.8% 22.9%

Source: Audited Financial Statements for the Financial Years ending on December 31, 2020G, 2021G and 2022G.

Prepaid expenses and other assets include various assets, expenses and amounts.

The deferred supervision fees are fees from the Saudi Central Bank, the Council of Health Insurance, and Najm Company. It should be noted
that the balance of these expenses fluctuates constantly, being affected by the fluctuation of the volume of business in different sectors. The
value of these fees increased by 263.3%, or by SAR (10.0 million), from SAR (3.8 million) as of December 31, 2020G to SAR (13.9 million)
as of December 31, 2021G. The balance then decreased by 51.5%. or a value of SAR (7.1 million) as of December 31, 2022G. While the
increase as of December 31, 2021G was driven by an augmentation in the volume of business in the vehicle/motor sector, which led to an
increase in Najm Company’s expenses, the subsequent decrease was also due to a decline in the volume of business under the same sector,
which automatically resulted in a decrease in Najm Company’s expenses.

Other prepaid expenses mainly include miscellaneous expenses such as medical insurance expenses and deposits. These expenses increased
by 29.0%, or SAR (0.8 million), from SAR (2.6 million) as of December 31, 2020G to SAR (3.4 million) as of December 31, 2021G, with a
slight additional increase of 6.7%. or a value of SAR (0.2 million) to reach SAR (3.6 million) as of December 31, 2022G. The ongoing rise was
driven by higher medical insurance expenses and surplus loss deposits. It should be noted that these expenses fluctuate periodically, as they are
not only affected by business activity.

Amounts receivable from the Arab War Risks Insurance Fund (AWRIS) include the Company’s share of the aforesaid fund’s profits. These
amounts did not witness any noticeable change during the period between 2020G and 2022G, but rather remained almost constant. It should
be noted that the AWRIS Fund plays a role similar to that of the Syndicate of Insurance Companies, as it provides integrated, appropriate and
rapid coverage of war and other political risks to its member companies.

VAT refunds are amounts that represent collection debit balances associated with some unbilled balances and some unearned insurance
premium balances not yet collected. The balance decreased by 72.2%, or SAR (3.8 million), from SAR (5.2 million) as of December 31, 2020G
and reached SAR (1.5 million) as of December 31, 2021G, as a result of recording VAT credit amounts of SAR (4.4 million) related to some
unearned premiums balances, which led to a decrease in the debit balance. The balance increased by 57.1%, or SAR (0.8 million) to SAR (2.3
million), as of December 31, 2022G, as a result of some balances related to hidden defects insurance.

Employee receivables are balances associated with low-value advances and loans made to employees in the ordinary course of business. In
this regard, the Company’s policy stipulates the granting of housing allowances whose value varies according to the employee’s salary and is
deducted from this salary within a period of time ranging between six months and a year. These balances fluctuate constantly and are affected

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by the value and number of loans that are requested and approved by the Company’s management.

Regarding receivables from Manafeth Fund, they represent the Company’s share associated with Manafeth Insurance which is managed by
Tawuniya Insurance. The debit balance from the Manafeth Fund witnessed a partial increase of 8.1%, or SAR (0.1 million), from SAR (0.8
million) as of December 31, 2020G to SAR (0.9 million) as of December 31, 2021G, before decreasing to zero as of December 31, 2022G.
The balance fluctuates within the normal course of business and is affected by the pace of collection. It should also be indicated that the
aforementioned decrease as of December 31, 2022G was impacted by a decline in the scope and number of Manafeth insurance policies that
were issued through the Company by way of Najm Insurance Company.

Receivables from the Umrah Fund are balances related to medical and general accident insurance services that are provided during the Hajj and
Umrah seasons which is managed by Tawuniya Insurance. The balance decreased by 95.7%, or SAR (4.2 million), from SAR (4.4 million) as
of December 31, 2020G to SAR (0.2 million) as of December 31, 2021G, as a result of a decline in the scope of aforementioned services, as
restrictions related to the COVID-19 pandemic were still partially in effect. Then the balance increased by 7,151.8%, or SAR (13.7 million) and
reached SAR (13.9 million), as of December 31, 2022G, after restrictions were completely lifted during the year 2022G.

Accrued income is related to various deposits held by the Company in addition to unrealized income related to investments. Accrued income
increased by 129.1%, or SAR (0.9 million), from SAR (0.7 million) as of December 31, 2020G, to SAR (1.6 million), as of December 31,
2021G, as a result of the increase in interest rates. The balance then witnessed a slight decrease of 10.6%, or by SAR (0.2 million) and attained
SAR (1.5 million), as of December 31, 2022G. The decrease was linked to the adoption of new accounting policies that stipulated including
income in the investment value.

Other balances mainly include advance payments to a number of suppliers with whom the Company deals. The balance increased by 104.9%,
or SAR (1.2 million), from SAR (1.1 million) as of December 31, 2020G, to SAR (2.3 million), as of December 31, 2021G. Then the balance
decreased by 28.2%, or SAR (0.6 million) to SAR (1.7 million) as of December 31, 2022G, since the value of these payments is generally
related to the scope and volume of services provided by suppliers.

5.5.11 Property and Equipment

The following table presents details of property and equipment for the fiscal years ending December 31, 2020G, December 31, 2021G, and
December 31, 2022G.

Table No. (42): Property and Equipment

Fiscal Year Ended December 31 Increase/(Decrease) CAGR

Thousands Saudi Riyals
2020G 2021G 2022G December December
(2020G-2022G)
(Audited) (Audited) (Audited) 2021G 2022G

Vehicles 9 7 - (15.6%) (100.0%) (100.0%)

Computers 1,407 1,352 1,111 (4.0%) (17.8%) (11.2%)

Office furniture, fixtures, and fittings (equipment) 1,364 1,751 2,261 28.3% 29.1% 28.7%

Leasehold improvements 1,203 2,100 1,877 74.6% (10.7%) 24.9%

Net Total 3,984 5,210 5,248 30.8% 0.7% 14.8%

Source: Audited Financial Statements for the Financial Years ending on December 31, 2020G, 2021G and 2022G.

With regard to property and equipment, the Company does not have a high value fixed asset base.

Property and equipment included three components:

Vehicles: The value of vehicles classified as property and equipment was low, as the Company owns a number of cars and vehicles that are
used by employees on their daily commute.

Computers: This category includes various computer devices used by the Company’s employees in the administrative offices and various
centers.

Office furniture, fixtures and fittings (equipment): All used in the Company’s administrative offices and various operating centers.

Leasehold improvements: Expenses related to decoration and installation works carried out in the Company’s various offices.

The balance of property and equipment did not record any noticeable movement during the period extending between December 31, 2020G and
December 31, 2022G, rather a partial increase of 30.8%, or a value of SAR (1.2 million) was recorded, from SAR (4.0 million) as of December
31. 2020G to SAR (5.2 million), as of December 31, 2021G as a result of increase in leasehold improvements.

Useful lives of assets are reviewed at the end of each reporting date and adjusted, if necessary. The carrying value of an asset is reduced
immediately to its recoverable amount if the carrying value of the asset is greater than its estimated recoverable amount. Profits and losses
resulting from disposal are determined at book value and included in the income statement under other income.

It should be noted that the company currently does not intend to purchase or lease any important or high-value assets during the coming periods.

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5.5.12 Right-of-use Assets
The following table presents details of the right-of-use assets for the financial years ending on December 31, 2020G, December 31, 2021G,
and December 31, 2022G.

Table No. (43): Right-of-use Assets

Fiscal Year Ended December 31 Increase/(Decrease) CAGR

Thousands Saudi Riyals
2020G 2021G 2022G December December
(2020G-2022G)
(Audited) (Audited) (Audited) 2021G 2022G

Point-of-sale buildings - 1,756 907 NA (48.3%) NA

Main office buildings - 2,650 1,780 NA (32.8%) NA

Total as of December 31 - 4,405 2,687 NA (39.0%) NA

Source: Audited Financial Statements for the Financial Years ending on December 31, 2020G, 2021G and 2022G.

Right-of-use asset balances are mainly associated with contracts for main office buildings and point-of-sale buildings.

It should be noted that the lease contracts for the aforementioned buildings range from a period of six months to 5 years, and the option of
extension with the approval of both parties. The duration of the lease contract is discussed on an individual basis, and the contract includes
a wide range of time periods and conditions. Lease contracts do not include any conditions that do not use leased assets as collateral for
borrowing purposes.

Right-of-use assets’ balance was not recorded as of December 31, 2020G, because the Company applied IFRS 16 concerning capital lease
contracts in the year 2021G, given that the Company has concluded lease contracts whose duration exceeded one year during the aforementioned
year.

The Company recorded the right-of-use assets balance of SAR (4.4 million) as of December 31, 2021G, before this balance decreased by
39.0%, or SAR (1.7 million) and reached SAR (2.7 million) as of December 31, 2022G. The indicated decrease was related to the ongoing
amortization of these assets.

5.5.13 Intangible Assets

The following table presents details of the right to intangible assets for the financial years ending on December 31, 2020G, December 31,
2021G and December 31, 2022G.

Table No. (44): Intangible Assets

Fiscal Year Ended December 31 Increase/(Decrease) CAGR

Thousands Saudi Riyals
2020G 2021G 2022G December December
(2020G-2022G)
(Audited) (Audited) (Audited) 2021G 2022G

Computer programs 1,863 5,721 6,053 207.1% 5.8% 80.3%

Net Total 1,863 5,721 6,053 207.1% 5.8% 80.3%

Source: Audited Financial Statements for the Financial Years ending on December 31, 2020G, 2021G and 2022G.

Intangible assets mainly include various computer programs used during daily operations.

Intangible assets with finite useful lives are amortized over their estimated useful lives in accordance with the expected pattern of consumption
of economic benefits. The estimated useful life of the software is four years. Intangible assets with an indefinite useful life are not subject
to amortization, but are tested for impairment at one or more statement of financial position dates if there is an indication of impairment.
Intangible assets with finite useful lives are reviewed for impairment when events or changes in circumstances indicate that the carrying value
may not be recoverable. The amortization expense is included in general and administrative expenses in the income statement.

The balance of intangible assets increased by 207.1%, or SAR (3.9 million), from SAR (1.9 million) as of December 31, 2020G to SAR
(5.7 million) as of December 31, 2021G, with an additional increase of 5.8 % or a value of SAR (0.3 million) as of December 31, 2022G.
The aforementioned increase was driven by new applications that were added to programs, in addition to expenses related to the process of
implementing IFRS 17 “Insurance Contracts.”

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5.5.14 Goodwill
The Company began practicing insurance operations on January 1, 2009G. On February 1, 2009G, the General Assembly approved the
conclusion of an agreement under which it would acquire the entire business (net identifiable assets) of Saudi Al Sagr Insurance Company as
of January 1, 2009G, with goodwill amounting to SAR (39.0 million), pursuant to a letter from the Saudi Central Bank, after completing the
procedures required under the Authority’s letter issued on November 10, 2008G. The Company later adjusted the value of goodwill and reduce
it by SAR (13.5 million), based on correspondence with the Saudi Central Bank in this regard, to become SAR (25.5 million). The Company
paid an amount of SAR (9.9 million) in 2011G, and SAR (15.6 million) in 2021G, in exchange for goodwill to Shareholders of the Saudi Al
Sagr Insurance Company.

In regard to impairment testing, management determines the recoverable amount of the cash generating unit based on value-in-use calculations.
These calculations require the use of estimates regarding future cash flows, based on the last five business plans, and the use of an appropriate
discount rate. Cash flows beyond the five-year period are extrapolated using the estimated growth rate shown below. This growth rate is
consistent with projections in industry reports for the industry in which the cash generating unit operates. Actual conditions may differ from
assumptions and therefore, actual cash flows may differ from those projected with a potentially material impact on recoverability. The value-
in-use calculation is most sensitive to assumptions regarding compound annual growth in gross written premiums and average claims ratio,
which are determined according to historical performance, recent market and industry trends, and expected results of various performance
improvement metrics implemented by management.

5.5.15 Statutory Deposit and Revenues

The statutory deposit represents 10.0% of the paid-up capital maintained in accordance with the Cooperative Insurance Companies Control
Law in the KSA. The Saudi Central Bank has the right to the profits of this statutory deposit that cannot be withdrawn without its approval.

In accordance with the instructions of the Saudi Central Bank contained in the circular issued on March 1, 2016G, the Company recorded the
commissions due on the statutory deposit as of December 31, 2021G as an asset and a liability in these financial statements. In 2022G, the
Company liquidated statutory deposits amounting to SAR (19.0 million) at the expense of reducing capital.

5.5.16 Creditors
Creditors’ balances mainly consist of current claims due for settlement. The balance decreased by 24.9%, or SAR (1.9 million), from SAR (7.8
million) as of December 31, 2020G, to SAR (5.9 million), as of December 31, 2021G, with an additional decrease of 30.0%, or a value of SAR
(1.8 million) as of December 31, 2022G. The aforementioned successive decrease was mainly related to ongoing repayments and settlement of
outstanding balances against outstanding claims balances.

5.5.17 Accrued Expenses and Other Liabilities

The following table presents details of accrued expenses and other liabilities for the fiscal years ending on December 31, 2020G, December
31, 2021G, and December 31, 2022G.

Table No. (45): Accrued Expenses and Other Liabilities

Fiscal Year Ended December 31 Increase/(Decrease) CAGR

Thousands Saudi Riyals
2020G 2021G 2022G December December
(2020G-2022G)
(Audited) (Audited) (Audited) 2021G 2022G

Commission due 9,408 10,949 12,903 16.4% 17.8% 17.1%

Cast tax M Add-on is payable 298 4,785 5,762 1,506.4% 20.4% 339.8%

Fees Due to Najm Company 1,809 4,034 4,511 122.9% 11.8% 57.9%

Fees Inspection services and costs Other due payment 1,253 2,477 10,038 97.7% 305.2% 183.0%

Fees SupervisorPostponed 1,894 2,247 2,089 18.6% (7.0%) 5.0%

FeesDeserved professionalism 1,184 835 2,014 (29.5%) 141.1% 30.4%

Payable employee benefits 567 200 200 (64.7%) - (40.6%)

Fees Administrative Payable to a third party 612 1 382 (99.8%) 32,124.2% (21.0%)

Installments Excess accrued loss 6,777 - - (%100.0) NA (100,0%)

Board Members meeting attendance allowances are payable 3,837 4,239 3,324 10.5% (21.6%) (6.9%)

Other 2,282 2,554 7,155 %12.0 180.1% 77.1%

Total 29,921 32,321 48,376 8.0% 49.7% 27.2%

Source: Audited Financial Statements for the Financial Years ending on December 31, 2020G, 2021G and 2022G.

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Accrued expenses and other liabilities were concentrated in accrued commissions, VAT payable, inspection services fees and other costs
payable, as the aforementioned components represented a rate of 36.6%, 56.3%, and 59.3% as of December 31, 2020G, 31 December 2021G
and December 31, 2022G, respectively.

Commissions payable represent commissions to suppliers and intermediaries who deal with the Company for the purpose of cooperating and
securing business. The balance of commissions payable increased by 16.4%, or SAR (1.5 million), from SAR (9.4 million) as of December 31,
2020G to SAR (10.9 million) as of December 31, 2021G, with an additional increase of 17.8%. or a value of SAR (2.0 million), to SAR (12.9
million) as of December 31, 2022G. The ongoing rise was generally influenced by higher written premiums and uncollected premium balances,
given that the payment of commissions is usually linked to the process of collecting receivable balances.

The VAT payable represents the credit balance to the ZATCA regarding works carried out and insurance policies issued by the Company. The
balance gradually increased by 1,506.4%, or SAR (4.5 million), from SAR (0.3 million) as of December 31, 2020G, to SAR (4.8 million), as of
December 31, 2021G, with an additional increase of 20.4%, or a value of SAR (1.0 million) to SAR (5.8 million) as of December 31, 2022G.
The aforementioned increase was affected by the rise in business in general, and the issuance of policies with a high value, especially within
the medical and motor insurance sectors.

Accrued expenses owed to Najm Company are related to services provided by this company, which mainly include claims management. These
fees increased by 122.9%, or SAR (2.2 million), from SAR (1.8 million) as of December 31, 2020G to SAR (4.0 million) as of December 31,
2021G, with an additional increase of 11.8% to reach SAR (4.5 million) as of December 31, 2022G. The successive increase was driven by a
rise in business under the motor insurance segment.

Accrued expenses for inspection services and other costs payable are credits to Najm Company for managing the business of Manafeth. The
balance increased by 97.7%, or SAR (1.2 million), from SAR (1.3 million), as of December 31, 2020G, to SAR (2.5 million), as of December
31, 2020G, with an additional increase of 305.2%, or SAR (7.6 million) to SAR (10.0 million) as of December 31, 2022G. The ongoing rise
was linked to the increase in the volume of hidden defect insurance business.

Deferred supervision expenses represent fees payable to the Saudi Central Bank and the Council of Health Insurance. These fees did not
witness radical changes between the years 2020G and 2022G, rather a slight increase was recorded by 18.6%, or a value of SAR (0.3 million),
from SAR (1.9 million) as of December 31, 2020G to SAR (2.2 million) as of December 31, 2021G, then the balance partially decreased to
SAR (2.1 million) as of December 31, 2022G.

Accrued professional fees include those of the external auditor, financial advisors and actuaries. The value of these expenses decreased by
29.5%, or SAR (0.3 million), from SAR (1.2 million) as of December 31, 2020G to SAR (0.8 million) as of December 31, 2021G, after the
external auditor’s fees decreased. Then the balance increased by 141.1%, or a value of SAR (1.2 million), as of December 31, 2022G, due to
the fees associated with the merger that took place in 2022G.

In relation to accrued employee benefits, they include salaries and allowances payable to employees at the end of each financial period. It
should be noted that the Company’s policy stipulates that monthly salaries are paid before the end of each month, but this payment process may
be delayed at the end of the year as a result of the closure of accounts. The balance of benefits and salaries was relatively high as of December
31, 2020G, and then decreased by 64.7%, or SAR (0.4 million), from SAR (0.6 million) as of December 31, 2020G, to SAR (0.2 million) as
of December 31, 2021G and 2022G. This decrease was affected by the repayment of benefits that had been recorded in prior periods as credit
balance to one of the former directors.

Third-party administrative expenses are fees payable to companies that Al Sagr Insurance engage in business with, in exchange for managing
the Company’s insurance claims. These fees are calculated as a percentage of the insurance premiums and are amortized over the period of
insurance coverage. The value of these fees amounted to SAR (0.6 million) as of December 31, 2020G, then a decrease to zero was recorded as
of December 31, 2021G, after the Company concluded new contracts with new companies during this year. Services provided by the mentioned
companies are usually free during the first year of the contract. Later, an increase of SAR (0.4 million) was recorded as of December 31, 2022G
after new contracts took effect.

Regarding accrued surplus loss premiums recorded in the amount of SAR (6.8 million) as of December 31, 2020G, they are related to
reinsurance premiums.

Accrued expenses included Directors’ remuneration and meeting attendance allowances. The Company’s policy stipulates the payment of these
remuneration and allowances as stipulated in the provisions of its Articles of Incorporation. The total value of remuneration and allowances
increased by 10.5%, or SAR (0.4 million), from SAR (3.8 million) as of December 31, 2020G, to SAR (4.2 million) as of December 31, 2021G.
Then the balance decreased by 21, 6%, or an amount of SAR (0.9 million), to SAR (3.3 million) as of December 31, 2022G. These balances
fluctuate constantly as they are affected by the Company’s decisions regarding remuneration and meetings held within the mentioned period.

Other expenses included social insurance, taxes, and miscellaneous expenses. These expenses did not witness any fundamental changes between
December 31, 2020G and December 31, 2021G. However, the balance increased by 180.1% or a value of SAR (4.6 million), from SAR (2.6
million) as of December 31, 2021G to SAR (7.2 million) as of December 31, 2022G. This rise was within the normal course of business.

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5.5.18 Reinsurance Payables
Reinsurance payables include reinsurance premiums ceded/assigned and payable under reinsurance transactions and agreements, which
are subject to adjustments according to reinsurance commissions payable from reinsurers and reinsurers share of claims paid. The balance
increased by 563.7%, or SAR (15.2 million), from SAR (2.7 million), as of December 31, 2020G, to SAR (17.9 million), as of December 31,
2021G, with an additional increase of 12.8%, or SAR (2.3 million) as of December 31, 2022G. The ongoing increase was influenced by several
factors, including the presence of a high value amount associated with facultative reinsurance, the settlement of the surplus loss balance for the
motor sector, and a balance associated with hidden defect insurance.

5.5.19 Unearned Insurance Premiums

Insurance premiums are transferred to the income statement on a proportional basis over the terms of insurance policies to which they relate.
Unearned premiums represent the share of premiums written relating to the period of coverage in effect.

The balance of unearned insurance premiums increased by 43.8%, or SAR (75.1 million), from SAR (171.4 million) as of December 31,
2020G, to SAR (246.5 million) as of December 31, 2021G, with an additional increase of 0,000. 4%, or a value of SAR (0.9 million) as of
December 31, 2022G. The ongoing rise was driven by an increase in insurance premiums, specifically under the vehicle sector.

5.5.20 Unearned Reinsurance Commission

The following table shows details of unearned reinsurance commission for the fiscal years ending on December 31, 2020G, December 31,
2021G, and December 31, 2022G.

Table No. (46): Unearned Reinsurance Commission

Fiscal Year Ended December 31 Increase/(Decrease) CAGR

Thousands Saudi Riyals
2020G 2021G 2022G December December
(2020G-2022G)
(Audited) (Audited) (Audited) 2021G 2022G

January 1 2,197 3,195 2,776 45.4% (13.1%) 12.4%

Commission received during the year 7,313 4,210 7,081 (42.4%) 68.2% (1.6%)

Commission earned during the year (6,315) (4,628) (6,614) (26.7%) 42.9% 2.3%

December 31 3,195 2,776 3,244 (13.1%) 16.9% 0.8%

Source: Audited Financial Statements for the Financial Years ending on December 31, 2020G, 2021G and 2022G.

Unearned reinsurance commission represents reinsurance commission income from business assigned/ceded pursuant to pro rata and facultative
reinsurance transactions. The commission is recorded in the income statement over the period of the insurance policies to which it is linked
on a proportional basis. Unearned reinsurance commission represents the share of the commission related to the unexpired period of insurance
coverage.

The balance of unearned reinsurance commission decreased by 13.1%, or SAR (0.4 million), from SAR (3.2 million) as of December 31,
2020G, to SAR (2.8 million) as of December 31, 2021G, as a result of reviewing a number of reinsurance agreements. The balance then
increased by 16.9%, or SAR (0.5 million), as of December 31, 2022G, affected by an additional review of a number of reinsurance agreements,
which led to an increase in the value of the commission.

5.5.21 Outstanding Claims

Outstanding claims are claims under settlement. These claims include the total estimated cost of claims incurred but outstanding at the statement
of financial position date. Provisions are set aside for claims reported and unpaid at the date of the statement of financial position on a case-
by-case basis. A provision is also set aside, in accordance with management’s estimates and the Company’s previous experience, for the cost
of paying claims incurred but not reported at the date of the statement of financial position. The final liabilities may be more or less than the
allowance set aside.

The balance of outstanding claims decreased by 30.7%, or SAR (32.7 million), from SAR (106.6 million) as of December 31, 2020G to SAR
(73.8 million) as of December 31, 2021G, with a continuing decrease of 26.9%. or a value of SAR (19.8 million), to SAR (54.0 million) as of
December 31, 2022G. The ongoing decline can be attributed to the decrease in the value of claims under the engineering and general accident
sectors after continuous reimbursements.

5.5.22 Claims Incurred but Not Reported

Estimates are made at the end of the reporting period for both the ultimate cost of a claim and the expected final costs of claims incurred but not
reported as well as the reinsurers’ share of such claims based on reinsurance agreements. Unpaid claims are estimated using valuation inputs
for individual cases reported to the Company. At the end of each reporting period, estimates of unpaid claims are reassessed using valuation
inputs for the Company’s individual reported cases. At the end of each reporting period, the prior year’s claims estimates are reassessed for
adequacy and changes are made to the allowance.

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The provision for claims incurred but not reported is an estimate of claims that are expected to be presented after the statement of financial
position date for an insured incident that occurred before the statement of financial position date. Technical methods used by management in
estimating the cost of claims as well as incurred but not reported claims are done by following the same methods of settling previous claims
when predicting methods of paying future claims.

Actuaries use a variety of methods to determine these provisions. These methods are based on a number of explicit or implicit assumptions
regarding the expected settlement value and the claims settlement pattern.

The balance of incurred but not reported claims decreased by 24.1%, or SAR (18.4 million), from SAR (76.1 million) as of December 31,
2020G to SAR (57.8 million) as of December 31, 2021G, with a continued decrease of 15%. 4%, or a value of SAR (8.9 million) as of
December 31, 2022G. The ongoing decline was largely due to an improvement in claims management process and continued repayment of all
past-due balances.

5.5.23 Additional Insurance Premium Reserves

Regarding insurance premium reserves, they are calculated by an actuary who works on estimating the reserve disability and loss premium. The
balance increased by 15.6%, or SAR (2.2 million), from SAR (14.0 million), as of December 31, 2020G, to SAR (16.2 million), as of December
31, 2021G, with an additional increase of 60.2%, or SAR (9.8 million) to SAR (26.0 million) as of December 31, 2022G. This increase was
affected by the rise in the loss rate and expected losses associated with the vehicle insurance sector.

5.5.24 Other Technical Reserves

Other technical reserves include various reserves, including loss adjustment expense reserves and various other reserves. The balance decreased
by 16.2%, or SAR (1.0 million), from SAR (6.1 million) as of December 31, 2020G, to SAR (5.1 million), as of December 31, 2021G, with
an additional decrease of 16.4%, or SAR (0. 8 million) as of December 31, 2022G. The value of these reserves fluctuates continuously. These
reserves are generally related to claims, as the Company aims to maintain adequate reserves in relation to its insurance business in order to
protect against adverse developments and future claims.

5.5.25 Lease Contracts Obligation

As mentioned previously, lease obligations are related to lease contracts for the main offices and points of sale buildings acquired under capital
leases. The balance was zero as of December 31, 2020G, but increased to SAR (3.8 million) as of December 31, 2021G. It then decreased by
31.2%, or SAR (1.2 million) and reached SAR (2.6 million) as of December 31, 2022G. While the increase as of December 31, 2021G was
driven by the conclusion of new contracts and the application of IFRS 16, the subsequent decrease as of December 31, 2022G was due to the
continued amortization of these assets and liabilities.

5.5.26 Due to Related Parties and Transactions with Related Parties

The following table presents details of the main transactions with related parties for the financial years ending on December 31, 2020G,
December 31, 2021G, and December 31, 2022G.

Table No. (47): Due to Related Parties and Transactions with Related Parties

Fiscal Year Ended December 31 Increase/(Decrease) CAGR

Thousands Saudi Riyals
2020G 2021G 2022G December December
(2020G-2022G)
(Audited) (Audited) (Audited) 2021G 2022G

A) Details of major transactions with related parties during the financial year ending on December 31:

Gross written premiums 14,518 5,195 1,126 (64.2%) (78.3%) (72.2%)

Lease expenses (1,174) (1,184) (335) 0.8% (71.7%) (46.6%)

Consulting services (552) (100.0%) NA (100.0%)

Reinsurance commissions revenue 33 45 16 35.5% (64.2%) (30.4%)

Reinsurers share of claims paid 194 144 243 (26.0%) 69.1% 11.8%

Assigned reinsurance premiums (461) (915) (4) 98.3% (99.5%) (90.3%)

Claims incurred (2,315) (4,372) (111) 88.9% (97.5%) (78.1%)

Remuneration of Board Members and Attendance Allowances (3,817) (3,931) - %3.0 (100.0%) (100.0%)

Total 10,242 (1,088) 935 (110.6%) (185.9%) (69.8%)

Source: Audited Financial Statements for the Financial Years ending on December 31, 2020G, 2021G and 2022G.

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Related party transactions include transactions entered into with associate companies, major shareholders, key management personnel and other
companies under common control or over which these parties have significant influence. Pricing policies and terms of these transactions are
approved by the Company’s Management and Board of Directors. Transactions with related parties comprise transactions related to insurance
services provided and obtained by the Company in the ordinary course of business, in addition to transactions with the official management
personnel.

With respect to transactions with official management personnel, it includes employees’ salaries, benefits and end-of-service benefits. These
compensations are subject to the employment contract’s terms and the Company’s Bylaws.

5.5.27 Employee Benefits Obligations

The following table details employee benefits obligations for the fiscal years ending on December 31, 2020G, December 31, 2021G, and
December 31, 2022G.

Table No. (48): Employee Benefits Obligations

Fiscal Year Ended December 31 Increase/(Decrease) CAGR

Thousands Saudi Riyals
2020G 2021G 2022G December December
(2020G-2022G)
(Audited) (Audited) (Audited) 2021G 2022G

January 1 9,664 9,207 9,204 (4.7%) (0.0%) (2.4%)

Loaded during the year 2,473 2,026 2,125 (18.1%) 4.9% (7.3%)

Sum paid during the year (1,104) (950) (1,748) (13.9%) 83.9% 25.8%

Profit on revaluation of liabilities (1,825) (1,079) (1,550) (40.9%) 43.6% (7.9%)

December 31 9,207 9,204 8,032 (%0,0) (12.7%) (%6.66)

Source: Audited Financial Statements for the Financial Years ending on December 31, 2020G, 2021G and 2022G.

Employee benefits obligations are end-of-service expenses payable to employees. The Company implements a defined benefit plan that
complies with the requirements of the Saudi Labor Law. The amounts paid upon the end of employees’ services in accordance with the plan are
calculated on the basis of last salaries and allowances and years of accumulated service as of the date of the end of their service, as indicated in
the conditions stipulated in the Saudi Labor Law. Employees’ end-of-service benefits plans are unfunded and satisfied once reported.

Sensitivity analyzes are based on the change in any assumption while holding all other assumptions constant. In reality, this is unlikely
to happen, and changes in some assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to the
fundamental actuarial assumptions, the same method (the present value of the defined benefit obligation calculated by the planned unit credit
method at the end of the reporting period) was applied when calculating employees’ end-of-service benefits.

Employee end-of-service obligations remained constant at a value of (9.2 million) between December 31, 2020G and 2021G, then decreased by
12.7%, or SAR (1.2 million) to reach SAR (8.0 million) as of December 31, 2022G, after a number of resignations recorded during this period.

5.5.28 Zakat Payable

The Company received final Zakat assessments from 2012G to 2018G during 2020G, and the total additional Zakat provision according
to assessments amounted to SAR (36.3 million) for these aforementioned years. The Company submitted an appeal to the Saudi General
Secretariat of Zakat, Tax, and Customs Committees (GSZTCC) against these assessments, and a settlement request to the Settlement Committee
of the Zakat, Tax and Customs Authority (ZATCA). During 2021G, the Committee offered to reduce the Zakat assessment to an amount of
SAR (36.2 million), which the Company did not accept, and accordingly, it continued the appeal submitted to the General Secretariat of Zakat
Committees (Supreme Committees), which issued the decision. The final additional Zakat provision was assessed at SAR (36.2 million). The
Company resubmitted an appeal to the Appeal Committee to resolve tax disputes against this assessment.

During 2021G, the Company received an initial assessment from the ZATCA for the years between 2019G and 2020G, with an additional
obligation of SAR (9.6 million) and submitted an objection to the General Secretariat of Zakat, Tax and Customs Committees (GSTCC) against
this assessment.

The Company believes that the Authority will reconsider the assessment and allow a certain deduction from the Zakat base, and that the current
value of Zakat maintained by the Company is sufficient to cover the uncertain Zakat obligation.

5.5.29 Income Commission Payable to the Saudi Central Bank

Regarding the commission income payable, it is related to the aforesaid statutory deposit that represents 10.0% of the paid-up capital, and is
maintained in accordance with the Cooperative Insurance Companies Control Law in the KSA. The Saudi Central Bank has the right to the
profits of this statutory deposit which cannot be withdrawn without its approval.

In accordance with the instructions of the Saudi Central Bank contained in the circular issued on March 1, 2016G, the Company recorded
commissions payable on the statutory deposit as of December 31, 2021G as an asset and a liability in the present financial statements. During
the year 2022G, the Company liquidated statutory deposits amounting to SAR (19.0 million), at the expense of reducing its capital.

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5.5.30 Dividends Payable
The balance of dividends payable, which remained constant at SAR (0.4 million) between December 31, 2020G and 2022G, represent past due
credit amounts owed to a number of previous shareholders. This balance remained constant during the aforementioned period.

5.5.31 Accrued Accumulated Surplus

In accordance with Article (35) of the Saudi Central Bank’s surplus distribution policy, the Company reacquired the unclaimed due surplus
amounting to SAR (0.7 million) for the year 2022G. The accumulated surplus due represents balances due to a number of policyholders
resigned from the Company. This balance gradually decreased during the period between December 31, 2020G and 2022G as a result of partial
repayments.

5.5.32 Equity
The following table shows details of equity for the financial years ending on December 31, 2020G, December 31, 2021G, and December 31,
2022G.

Table No. (49): Shareholders’ Equity/Property Rights

Fiscal Year Ended December 31 Increase/(Decrease) CAGR

Thousands Saudi Riyals
2020G 2021G 2022G December December
(2020G-2022G)
(Audited) (Audited) (Audited) 2021G 2022G

Capital 400,000 400,000 140,000 - (65.0%) (40.8%)

Accumulated losses (122,572) (197,043) (10,539) 60.8% (94.7%) (70.7%)

Reserve for Remeasurement of Employee Obligations 2,297 3,375 4,925 47.0% 45.9% 46.4%

Fair value reserve for investments 8,058 6,945 (4,061) (13.8%) (%158.5) NA

Balance at the end of the year 287,782 213,277 130,325 (25.9%) (38.9%) (32.7%)
Source: Audited Financial Statements for the Financial Years ending on December 31, 2020G, 2021G and 2022G.

As previously mentioned, the balance of equity includes capital and accumulated losses.

Share Capital
The authorized, issued and paid-up capital amounted to SAR (140 million) as of September 30, 2023G, and consists of (14 million) shares
with a value of SAR (10) per share. Regarding the decrease in capital from SAR (400.0 million) as of December 31, 2020G and 2021G to SAR
(140.0 million) as of December 31, 2022G, the Company’s accumulated losses amounted to SAR (269.4 million) as of December 31, 2022G,
which exceeded half of the Company’s capital and amounted to 67.4% of it. This condition, in accordance with the requirements of Article
150 of the companies Law’ regulations issued by Royal Decree No. (M/3) dated 28/01/1437H (corresponding to 10/11/2015G), requires the
Company’s Board to hold an EGA meeting during the period specified by the regulations to reduce accumulated losses to less than half of the
capital, or to dissolve the Company before the period specified in the Bylaws. Accordingly, the Company obtained the letter from the Saudi
Central Bank containing its approval to reduce the company’s capital on 24/02/1444H (corresponding to 20/09/2022G) and the approval of
the Capital Market Authority on 09/03/1444H (corresponding to 05/10/2022G). The Extraordinary General Assembly held on 17/03/1444H
(corresponding to 13/10/2022G) agreed to reduce the company’s capital from SAR (400.000.000) divided into 40 million shares with a nominal
value of SAR 10 per share to SAR (140.000.000) divided into 14 million shares with a nominal value of SAR 10 per share, by extinguishing
accumulated losses amounting to SAR (260.000.000) and canceling 26 million shares of the company’s shares, in order to reduce accumulated
losses to less than half of the capital. The amortization of accumulated losses against capital was reflected in the statement of financial position
for the year ending on December 31, 2022G.

Accumulated Losses
The value of accumulated losses amounted to SAR (122.6 million) as of December 31, 2020G, which then increased by 60.8%, or a value of
SAR (74.5 million) as of December 30, 2021G, after an increase in the value of losses associated with the shareholders’ account. The balance
decreased by 94.7%, or a value of SAR (186.5 million), as of December 31, 2022G, after amortizing a significant portion of the aforementioned
losses against the capital that was reduced.

Reserve for Remeasurement of Employee Obligations

The reserve for remeasurement of employee obligations is related to end-of-service expenses which are calculated by actuaries at the end of
each year. The balance fluctuates within the normal course of business and does not follow a specific trend.

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Fair Value Reserve for Investments
This reserve is related to available-for-sale investments that the Company acquired during the period extending between the years 2020G and
2022G. The value of this reserve fluctuates continuously. While a reserve was recorded positive with a value of SAR (8.1 million) and SAR
(6.9 million) in the years 2020G and 2021G, it became negative with a value of SAR (4.1 million) as of December 31, 2022G. The said balance
fluctuates constantly, as does the fair value of investments, which is reviewed on an ongoing basis.

5.6 Statement of Cash Flows

The following table presents details of the statement of cash flows for the financial years ending on December 31, 2020G, December 31,
2021G, and December 31, 2022G.

Table No. (50): Statement of Cash Flows

Fiscal Year Ended December 31 Increase/(Decrease) CAGR

Thousands Saudi Riyals
2020G 2021G 2022G December December
(2020G-2022G)
(Audited) (Audited) (Audited) 2021G 2022G

Cash flows used in operating activities

Total loss before Zakat and surplus (105,979) (72,701) (68,896) (31.4%) (5.2%) (19.4%)

Adjustments for non-cash items: NA NA NA

Depreciation of property and equipment 1,249 765 1,745 (38.7%) 128.1% 18.2%

Depreciation of the right-of-use assets - 2,314 1,821 NA (21.3%) NA

Amortization of intangible assets 654 603 1,835 (7.8%) 204.1% 67.4%

Provision for employee benefits obligations 2,473 2,026 2,125 (18.1%) 4.9% (7.3%)

Change in the fair value of financial assets at FVTPL (6,157) (9,610) 1,582 56.1% (116.5%) NA

Profit realized from available-for-sale investments (2,419) (14,567) (11,581) 502.1% (20.5%) 118.8%

Loss realized on financial assets at FVTPL (1,109) 1,043 415 (%194.0) (60.2%) NA

Refund of surplus dividends due (9,187) (16,042) (691) 74.6% (95.7%) (72.6%)

Financial costs of lease obligations - 129 62 NA (51.8%) NA

Allowance for doubtful debts (Recovered) 83 3,209 (1,028) 3,754.8% (132.0%) NA

Losses on disposal of property and equipment - - 3 NA NA NA

Changes in operating assets and liabilities:

Unearned insurance premiums (59,305) 75,076 914 (226.6%) (98.8%) NA

insurance premiums and balances receivable 27,979 (33,997) (9,556) (221.5%) (71.9%) NA

Reinsurers share of unearned insurance premiums (3,849) (8,543) (580) 121.9% (93.2%) (61.2%)

Reinsurers share of outstanding claims 43,146 (8,451) 21,833 (%119.6) (358.3%) (28.9%)

Reinsurers share of claims incurred but not reported 1,900 4,667 5,623 145.6% 20.5% 72.0%

Policy Acquisition Costs 2,835 (3,497) (2,782) (223.3%) (20.4%) NA

Prepaid expenses and other assets 1,845 (5,323) (6,015) (388.5%) 13.0% NA

Commission income payable from a statutory deposit (820) (267) (185) (67.4%) (30.6%) (52.5%)

Creditors 2,374 (1,936) (1,754) (181.6%) (9.4%) NA

Accrued expenses and other liabilities (1,061) 2,400 16,055 (326.2%) 568.8% NA

Reinsurance credit balances (2,632) 15,233 2,304 (678.8%) (84.9%) NA

Unearned reinsurance commission 998 (419) 468 (142.0%) (211.7%) (31.5%)

Outstanding claims (61,314) (32,718) (19,844) (46.6%) (39.3%) (43.1%)

Claims incurred but not reported 12,940 (18,363) (8,884) (241.9%) (51.6%) NA

Additional insurance premiums reserves (3,290) 2,185 9,762 (166.4%) 346.7% NA

Other technical reserves 4,084 (995) (843) (124.4%) (15.2%) NA

Paid employee benefits obligations (1,104) (950) (1,748) (13.9%) 83.9% 25.8%

Paid Zakat (5,373) (5,975) (4,599) %11.2 (23.0%) (7.5%)

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 Fiscal Year Ended December 31 Increase/(Decrease) CAGR
Thousands Saudi Riyals
2020G 2021G 2022G December December
(2020G-2022G)
(Audited) (Audited) (Audited) 2021G 2022G

Income commission payable to the Saudi Central Bank 820 267 185 (67.4%) (30.6%) (52.5%)

Financing costs paid for lease obligations - (129) (62) NA (51.8%) NA

Surplus dividends payable to policyholders - (0) - NA (%100.0) NA

Net cash used in operating activities (160,219) (124,564) (72,317) (22.3%) (41.9%) (33.8%)
Cash flows from investing activities

Monetization of short-term deposits 170,131 - 116,250 (100.0%) NA (17.3%)

Short-term deposits (50,000) - (157,000) (100.0%) NA 77.2%

Purchase of financial assets at FVTPL (285) (2,172) (2,519) 661.7% 16.0% 197.2%

Purchase of available-for-sale investments (42,991) (57,679) (57,822) 34.2% 0.2% 16.0%

Purchase of property and equipment (1,088) (1,992) (1,791) 83.0% (10.1%) 28.3%

Purchase of intangible assets (921) (4,461) (2,167) 384.4% (51.4%) 53.4%

Proceeds from disposal of available-for-sale investments 43,408 84,651 57,579 95.0% (32.0%) 15.2%

Proceeds from disposal of financial assets at FVTPL 5,199 54,011 36,821 938.9% (31.8%) 166.1%

Proceeds from disposal of held-to-maturity investments 110,000 - - (100.0%) NA (100.0%)

Proceeds from disposal of property and equipment - - 5 NA NA NA

Monetization of long-term deposits 15,000 - 19,000 (100.0%) NA 12.5%

Net cash generated from investing activities 248,452 72,359 8,357 (70.9%) (88.5%) (81.7%)
Cash flows from financing activities

Main components of lease payments - (2,912) (1,291) NA (55.7%) NA

Paid dividends - (0) - NA (100.0%) NA

Net cash used in financing activities - (2,913) (1,291) NA (55.7%) NA

Net decrease in cash and cash equivalents 88,233 (55,119) (65,252) (162.5%) 18.4% NA

Cash and cash equivalents at the beginning of the year 255,104 343,337 288,218 34.6% (16.1%) 6.3%

Cash and cash equivalents at the end of the year 343,337 288,218 222,967 (16.1%) (22.6%) (19.4%)
Net change in fair value reserve for available-for-sale
2,989 (1,113) (11,005) (137.2%) 888.9% NA
investments
Right-of-use assets for lease obligations - 6,718 103 NA (98.5%) NA
Settlement of dividends surplus due against debit premiums
26 - (100.0%) NA (100.0%)
collected from shareholders
Settlement of insurance premiums receivable from
1,172 - (100.0%) NA (100.0%)
shareholders through accrued lease
Settlement of insurance premiums receivable from
1,825 - (100.0%) NA (100.0%)
shareholders against outstanding claims
Profit remeasurement of employee benefits liabilities 1,825 1,079 1,550 (40.9%) 43.6% (7.9%)
Source: Audited Financial Statements for the Financial Years ending on December 31, 2020G, 2021G and 2022G.

In general, the movement of cash flows was affected by operational and investment activities between 2020G and 2022G. The Company
recorded a positive cash flow of SAR (88.2 million) in 2020G, yet a negative one in 2021G equal to SAR (55.1 million). The movement
between these two years was mainly affected by the movement of cash generated from investment activities, which witnessed a noticeable
decline of 70.9%, or a value of SAR (176.1 million), between 2020G and the year 2021G.

The value of the negative cash change increased by 18.4%, or SAR (10.1 million), from two negative cash flows of SAR (55.1 million) in
2021G and SAR (65.3 million) in 2022G. The aforementioned increase was affected by the additional decline witnessed in net cash generated
from investment activities from SAR (72.4 million) to SAR (8.4 million) in 2022G.

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5.6.1 Net Cash Used in Operating Activities
Regarding operating activities, the Company recorded successive negative cash flows of SAR (160.2 million), SAR (124.6 million), and SAR
(72.3 million) in 2020G, 2021G and 2022G. In general, negative cash flows were affected by losses incurred by the Company during the
aforementioned years.

The decrease in negative cash flow came by 22.3%, or SAR (35.7 million), from SAR (160.2 million) in 2020G to SAR (124.6 million) in
2021G, mainly affected by the decrease in the value of the annual loss by 31.4%. or a value of SAR (33.3 million), from SAR (106.0 million)
to SAR (72.7 million) between the two aforesaid years.

On the other hand, the additional decline in negative cash flow by 5.2%, or SAR (3.8 million) from SAR (72.7 million) in 2021G, to SAR (68.9
million) in 2022G, was affected by an additional decline in the annual loss, and a significant decrease witnessed in the balance of reinsurers’
share of outstanding claims.

5.6.2 Net Cash Generated from Investing Activities

The Company recorded a significant positive cash flow from investment activities amounting to SAR (248.5 million) in 2020G, as a result of
the liquidation of short-term deposits and the sale of held-to-maturity investments.

Cash flows from investment activities gradually decreased by 70.9%, or SAR (176.1 million), from SAR (248.5 million) in 2020G to SAR
(72.4 million) in 2021G. It is worth noting that the positive cash flow in 2021G resulted from the exclusion of investments available for sale
and investments held to maturity.

Positive cash flow recorded an additional decrease of 88.5% or SAR (64.0 million) to SAR (8.4 million) in 2022G. This decrease was influenced
by the binding/tying of short-term deposits worth SAR (157.0 million), and the purchase of available-for-sale investments worth SAR (57.8
million) during the aforementioned year.

5.6.3 Net Cash Used in Financing Activities

Negative cash flows from financing activities, amounting to SAR (2.9 million) and SAR (1.3 million) in 2021G and 2022G were related to
capital lease payments in relation to leased buildings and points of sale.

Management Discussion and Analysis for the Nine-month Period Ended September 30,
2023G

IFRS 17

Overview
IFRS 17 replaces IFRS 4 “Insurance Contracts” and is effective for annual periods beginning on or after January 1, 2023G, with early adoption
permitted. The Company expects to initially apply IFRS 17 on that date. IFRS 17 sets out principles for recognition, measurement, presentation
and disclosure for insurance contracts, reinsurance contracts and investment contracts with direct participation features.

Structure and Status of the Implementation Project

To ensure that insurance companies implement IFRS 17 to the highest standards, the Saudi Central Bank issued Circular No. 172, dated
December 20, 2018G, which directs all insurance companies to implement a four-stage model that includes a gap assessment, financial impact
assessment, implementation plan, and multiple experimental operations. The IFRS 17 implementation project has been substantially completed
under the supervision of the Steering Committee. The company submitted the required documents to the Saudi Central Bank.

Upon transition to IFRS 17, the Company applied the full retrospective approach to all insurance contracts issued and reinsurance contracts
held. Therefore, on the transition date, January 1, 2022, the Company did the following:

- Each group of insurance contracts is identified, recognized and measured as if IFRS 17 had always applied;
- Derecognition of any current balances that would not have existed if IFRS 17 had always been applied; and
- Any resulting difference is recognized in equity.
The impact on total equity, total assets and total liabilities as of January 1, 2023G and January 1, 2022G, arises from adjusting actuarial
risks, discounting, and adjusting the loss component and estimates of expected receipts from premiums. The overall decrease in net equity is
primarily due to a change in the methodology used for calculating the loss component adjustment under the requirements of IFRS 17 compared
to the premium deficiency reserve under IFRS.

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5.7 Performance Indicator
The following table presents details of performance indicators for the financial period ending on September 30, 2023G, and comparison figures
for the nine-month period ending on September 30, 2022G.

Table No. (51): Performance Indicator

Nine-month Period Ended September 30

Key Indicator
2022G Unaudited 2023G Unaudited

Insurance revenue growth rate N/A 3.8%

Insurance service expenses as a percentage of insurance revenues 5.3% 5.3%

Net expense ratio (36.4%) 84.7%

Net loss ratio 114.7% 93.8%

Attribution rate (includes net loss premiums) (16.8%) 9.6%

Commission expense as a percentage of written premiums 5.7% 6.4%

Source: Unaudited Financial Statements for the Nine-month Period Ended September 30, 2023G, and Comparative Figures Dated September 30, 2022G.

5.8 Income Statement

The following table presents details of the income statement for the financial period ending on September 30, 2023G, and the comparative
figures for the nine-month period ending on September 30, 2022G.

Table No. (52): Income Statement

Nine-month Period Ended September 30 Increase/(Decrease)

Thousands Saudi Riyals
2022G Unaudited 2023G Unaudited September2023G

Insurance revenues 351,546 364,878 3.8%

Insurance service expenses (344,909) (319,385) (7.4%)

Net revenues/(expenses) from reinsurance contracts (58,270) (22,822) (60.8%)

Insurance service result (51,633) 22,671 (143.9%)

Interest income from financial assets not measured at FVTPL 1,294 16,015 1,137.4%

Net (loss)/revenues on financial assets from investments measured at FVTPL 1,134 6,447 468.7%

Net investment revenues 2,428 22,462 825.2%

(Expenses)/financing revenues from insurance contracts issued 2,940 898 (69.5%)

Finance revenues /(expenses) from reinsurance contracts held (357) 722 (302.3%)

Net insurance financing revenues 2,583 1,620 (37.3%)

Net result of insurance and investment (46,621) 46,753 (200.3%)

Other operating expenses (18,772) (19,195) %2.2

Financing interest for lease obligations (48) (23) (52.3%)

Other income 10,175 11,650 14.5%

Total income/(loss) for the period before Zakat (55,267) 39,186 (170.9%)
Zakat expense (3,600) (4,200) 16.7%

Net income/(loss) for the period attributable to Shareholders (58,867) 34,986 (159.4%)
Source: Unaudited Financial Statements for the Nine-month Period Ended September 30, 2023G, and Comparative Figures Dated September 30, 2022G.

Insurance Revenues
Insurance revenues under IFRS 17 include gross written premiums, gross movement in unearned premiums, and expected credit losses on
receivables from policyholders, where the health sector and the motor sector are considered the two main business sectors of the Company,
together contributing 44.1% and 44.6% of the total insurance premiums written during the nine-month period ending on September 30, 2023G
and according to the comparative figures dated September 30, 2022G, respectively.

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Total written insurance premiums increased by 3.8% from SAR (351.5 million) in the nine-month period ending on September 30, 2022G to
SAR (364.9 million) in the same period ending on September 30, 2023G, as a result of growth in most sectors, especially the medical sector,
which recorded an increase in total premiums. Insurance subscriptions increased by 22.4% from SAR (142.3 million) in the nine-month period
ending on September 30, 2022G, to SAR (174.2 million) in the same period ending on September 30, 2023G.

Insurance Service Expenses

Insurance service expenses basically comprise claims incurred for the period, and other direct expenses incurred, in addition to the exhaustion
of cash flows from the acquisition of insurance contracts. Insurance service expenses decreased by 7.4%, from SAR (344.9 million) in the nine-
month period ending on September 30, 2022G to SAR (319.4 million) in the same period ending on September 30, 2023G, as a result of a 6.7%
decrease in the value of claims incurred and other direct expenses, from SAR (321.3 million) in the nine-month period ending on September
30, 2022G, to SAR (299.6 million) in the same period ending on September 30, 2023G.

Net Income/(Expenses) from Reinsurance Contracts

Net expenses from reinsurance contracts consist of reinsurance expenses less recoveries from reinsurers, as the Company recognizes reinsurance
expenses because it receives coverage or other services under groups of reinsurance contracts undertaken by the Company in accordance with
the risk management strategy, with the aim of protecting its entity from potential losses, and securing additional potential growth.

Net reinsurance contract expenses decreased by 60.8% from SAR (58.3 million) in the nine-month period ending on September 30, 2022G to
SAR (22.8 million) in the same period ending on September 30, 2023G, as a result of an increase in recovered claims from SAR (2.6 million)
in the nine-month period ending on September 30, 2022G, to SAR (30.9 million) in the same period ending on September 30, 2023G.

Interest Income from Financial Assets not Measured at FVTPL

Interest income increased from SAR (1.3 million) in the nine-month period ending on September 30, 2022G to SAR (16.0 million) in the same
period ending on September 30, 2023G. This is mainly due to the increase in the return on investments from 0.4% during the nine-month period
ending on 2022G, to 6.1% during the nine-month period ending on 2023G.

Net (Loss)/Income on Financial Assets from Investments Measured at FVTPL

Income from financial assets increased from SAR (1.1 million) in the nine-month period ending on September 30, 2022G to SAR (6.4 million)
in the same period ending on September 2023G, as a result of an increase in fair value.

(Expenses)/Financing Income from Insurance Contracts Issued

Insurance financing income or expense includes changes in the carrying value of groups of insurance and reinsurance contracts resulting from
the effects of the time value of money, financial risks, and changes therein. Insurance financing income or expenses during the period are
classified in the statement of profit or loss.

Financing Income /(Expenses) from Reinsurance Contracts Held

Net income/(expenses) from reinsurance contracts held under IFRS 17 comprise reinsurance premiums held/ceded, changes in the reinsurer’s
share of unearned premiums, reinsurance commission earned, reinsurance share of claims paid, reinsurance share of Outstanding claims,
reinsurance share of changes in claims incurred but not reported, change in reinsurance maturity reserve, expected credit losses on reinsurance
receivables, the impact of loss adjustment, and risk adjustment related to non-financial risks.

Other Operating Expenses

Other operating expenses consist largely of employees’ fees and professional expenses, which together represented 41.0% and 22.8% of the
total other operating expenses during the nine-month period ending on September 30, 2022G, and the same period ending on September 30,
2023G. Other operating expenses did not witness any material change between the two mentioned periods.

Other Revenues
Other revenues increased by 14.5% during the nine-month period ending on September 30, 2023G or by SAR (1.5 million) to reach SAR (11.7
million), compared to SAR (10.2 million) during the nine-month period ending on September 30, 2022G.

Zakat Expense
For more information, please refer to the section 5.5.28.

105
Net Income/(Loss) for the Period
The net loss for the period shifted by 159.4%, from a loss of SAR (58.9 million) in the nine-month period ending on September 30, 2022G to a
profit of SAR (35.0 million) in the nine-month period ending on September 30, 2023G. This is mainly due to the increase in the net insurance
service result, which went from a loss of SAR (51.6 million) in the nine-month period ending on September 30, 2022G to a profit of SAR (22.7
million) in the nine-month period ending on September 30, 2023G.

The aforementioned improvement was also affected by the increase in interest income from financial assets not measured at FVTPL, which
increased from SAR (1.3 million) in the nine-month period ending on September 30, 2022G, to reach SAR (16.0 million) in the nine-month
period ending on September 30, 2023G.

5.8.1 Revenues

Insurance Revenues
The following table shows insurance revenues for the financial period ending on September 30, 2023G, and comparative figures for the nine-
month period ending on September 30, 2022G.

Table No. (53): Insurance Revenues

Nine-month Period Ended September 30 Increase/(Decrease)

Thousands Saudi Riyals
2022G Unaudited 2023G Unaudited September2023G

Medical Insurance 142,334 174,151 22.4%

Comprehensive Vehicle Insurance 42,031 69,376 65.1%

Third-party Insurance (Liability/Vehicle) 135,957 71,415 (47.5%)

Engineering Insurance 7,721 10,100 30.8%

Property Insurance 11,756 16,945 44.1%

General Accident Insurance 11,146 19,653 76.3%

Marine Cargo Insurance (227) 1,146 (%604.2)

Marine Hull and Machinery Insurance 829 2,092 152.3%

Total 351,546 364,878 3.8%

As a percentage of the Total

Medical Insurance 40.5% 47.7% 44.1%

Comprehensive Vehicle Insurance %12.0 %19.0 15.5%

Third-party Insurance 38.7% 19.6% 29.1%

Engineering Insurance %2.2 2.8% 2.5%

Property Insurance 3.3% %4.6 %4.0

General Accident Insurance %3.2 5.4% %4.3

Marine Cargo Insurance (%0.1) %0.3 %0.1

Marine Hull and Machinery Insurance %0.2 %0.6 %0.4

Total 100.0% 100.0% 100.0%

Source: Unaudited Financial Statements for the Nine-month Period Ended September 30, 2023G, and Comparative Figures Dated September 30, 2022G.

Insurance revenue consists mainly of three components, which are: the total insurance premiums written, the change in the value of unearned
insurance premiums, and the allowance for the reduction of doubtful debts.

Total written insurance premiums during the nine-month period ending on September 30, 2023G were concentrated in the Eastern Region at a
rate of 62.0%, followed by the Western Region at a rate of 19.6%, and then the Central Region at a rate of 18.3%.

The medical and automotive (vehicle/motor) sector are the Company’s two main business sectors, which jointly contributed 44.1% and 44.6%
of the total insurance premiums written during the nine-month period ending on September 30, 2023G, and the comparative period dated
September 30, 2022G, respectively.

Medical Sector
Written premiums for the medical sector increased by 22.4% from SAR (142.3 million) in the nine-month period ending on September 30,
2022G, to SAR (174.2 million) in the nine-month period ending on September 30, 2023G. This was mainly driven by the change in the value
of unearned premiums.

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Comprehensive Vehicle Sector
Written premiums for the comprehensive vehicle sector increased by 65.1% from SAR (42.0 million) in the nine-month period ending on
September 30, 2022G, to SAR (69.4 million) in the nine-month period ending on September 30, 2023G due to the change in the value of
unearned premiums.

Third-party Liability Vehicle Sector

Insurance premiums written for the third-party liability vehicle sector decreased by 47.5% from SAR (136.0 million) in the nine-month period
ending on September 30, 2022G to SAR (71.4 million) in the nine-month period ending on September 30, 2023G. This was affected by a
decline in the number of policies subscribed to after the losses associated with this sector during the nine-month period ending on 2022G.

Engineering Sector
Insurance written premiums for the engineering sector increased by 30.8% from SAR (7.7 million) in the nine-month period ending September
30, 2022G, to SAR (10.1 million) in the nine-month period ending on September 30, 2023G due to a positive change in the value of unearned
insurance premiums of SAR (1.8 million) between the two mentioned periods.

Property Sector
Insurance premiums written in the property sector increased by 44.1%, from SAR (11.8 million) in the nine-month period ending on September
30, 2022G, to SAR (10.1 million) in the nine-month period ending on September 30, 2023G. This was driven by a positive change in the value
of unearned insurance premiums of SAR (2.4 million) between the two mentioned periods.

General Accident Sector

Insurance premiums written for the general accident sector increased by 76.3%, from SAR (11.1 million) in the nine-month period ending on
September 30, 2022G, to SAR (19.7 million) in the nine-month period ending on September 30, 2023G mainly due to an increase in the value
of written premiums in the medical errors sector by SAR (10.0 million) between the two mentioned periods.

Marine Hull and Machinery Sector

Insurance premiums written for the marine hull and machinery sector increased by 152.3%, from SAR (0.8 million) in the nine-month period
ending on September 30, 2022G, to SAR (2.1 million) in the nine-month period ending on September 30, 2023G due to the subscription to a
new insurance policy.

5.8.2 Insurance Service Expenses

The following table displays insurance service expenses for the financial period ending on September 30, 2023G, and comparative figures for
the nine-month period ending on September 30, 2022G.

Table No. (54): Insurance Services Expenses

Nine-month Period Ended September 30 Increase/(Decrease)

Thousands Saudi Riyals
2022G Unaudited 2023G Unaudited September2023G

Claims incurred and other direct expenses (321,259) (299,586) (6.7%)

Changes relating to previous service – settlement of liabilities
353 16,822 %4,671.0
relating to claims incurred
Losses in futile contracts 24,814 16,900 (31.9%)

Exhaustion of cash flows to acquire insurance (48,817) (53,521) 9.6%

Total (344,909) (319,385) (7.4%)

As a Percentage of the Total

Claims incurred and other direct expenses 93.1% 93.8%

Changes relating to previous service – settlement of liabilities
(%0.1) (5.3%)
relating to claims incurred
Losses in futile contracts (7.2%) (5.3%)

Exhaustion of cash flows to acquire insurance %14.2 16.8%

Total 100.0% 100.0%

Source: Unaudited Financial Statements for the Nine-month Period Ended September 30, 2023G, and Comparative Figures Dated September 30, 2022G.

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Insurance services expenses under IFRS mainly include claims incurred for the period and other direct expenses incurred in addition to the
exhaustion of cash flows from the acquisition of insurance contracts.

5.8.3 Claims Incurred and Other Direct Expenses

The following table shows the claims incurred and other direct expenses for the financial period ending on September 30, 2023G, and
comparative figures for the nine-month period ending on September 30, 2022G.

Table No. (55): Claims Incurred and Other Direct Expenses

Nine-month Period Ended September 30 Increase/(Decrease)

Thousands Saudi Riyals
2022G Unaudited 2023G Unaudited September2023G

Medical Insurance (92,909) (136,315) 46.7%

Comprehensive Vehicle Insurance (58,227) (60,038) 3.1%

Third-party Insurance (Liability/Vehicle) (158,220) (68,550) (56.7%)

Engineering Insurance (2,452) (2,756) 12.4%

Property Insurance (2,692) (27,545) 923.2%

General Accident Insurance (5,742) (4,004) (30.3%)

Marine Cargo Insurance (429) (184) (57.2%)

Marine Hull and Machinery Insurance (588) (193) (67.1%)

Total (321,259) (299,586) (6.7%)

As a percentage of the Total

Medical Insurance 28.9% 45.5%

Comprehensive Vehicle Insurance %18.1 20.0%

Third-party Insurance 49.2% 22.9%

Engineering Insurance 0.8% 0.9%

Property Insurance 0.8% 9.2%

General Accident Insurance %1.8 1.3%

Marine Cargo Insurance %0.1 0.1%

Marine Hull and Machinery Insurance %0.2 0.1%

Total 100.0% 100.0%

Source: Unaudited Financial Statements for the Nine-month Period Ended September 30, 2023G, and Comparative Figures Dated September 30, 2022G.

Claims incurred and other direct expenses consist of claims incurred during the period, in addition to the change in the value of claims incurred
but not reported.

Medical Sector
Although the total underwritten insurance revenues in the medical sector increased by 22.4% from SAR (142.3 million) in the nine-month
period ending on September 30, 2022G to SAR (174.2 million) in the nine months ending on September 30, 2023G, this increase was offset
by a similar increase in total claims incurred. Other direct expenses related to the medical sector increased by 46.7% from SAR (92.9 million)
in the nine-month period ending on September 30, 2022G, to SAR (136.3 million) in the nine-month period ending on September 30, 2023G.
This was mainly driven by the fluctuation in turnover between the two mentioned periods.

Comprehensive Vehicle Sector

Written premiums for the comprehensive vehicle sector increased by 65.1% from SAR (42.0 million) in the nine-month period ending on
September 30, 2022G, to SAR (69.4 million) in the nine-month period ending on September 30, 2023G. Moreover, the total claims and other
direct expenses increased by 3.1% from SAR (58.2 million) in the nine-month period ending on September 30, 2022G, to reach SAR (60.0
million) in the nine-month period ending on September 30, 2023G due to the fluctuation in turnover between the two mentioned periods.

108
Third-party Liability Vehicle Sector
Total claims and other direct expenses decreased by 56.7%, from SAR (158.2 million) in the nine-month period ending on September 30,
2022G, to SAR (68.6 million) in the nine-month period ending on September 30, 2023G, as a result of a decrease in written premiums for the
third-party liability vehicles sector by 47.5%, from SAR (136.0 million) in the nine-month period ending on September 30, 2022G, to SAR
(71.4 million) in the nine-month period ending on September 30, 2023G.

Property Sector
Total claims and other direct expenses increased from SAR (2.7 million) in the nine-month period ending on September 30, 2022G, to SAR
(27.5 million) in the nine-month period ending on September 30, 2023G, as a result of a new claim amounting to SAR (24.4 million) received
during the nine-month period ending on September 30, 2023G.

5.8.4 Changes Relating to Previous Service – Settlement of Obligations Relating to Claims

Incurred
Changes related to past service and settlement of obligations related to incurred claims represent the change in the value of the provisions and
reserves established by the Company in the statement of financial position that relate to the claims incurred. Total changes relating to prior
service witnessed an increase from SAR (0.4 million) in the nine-month period ending on September 30, 2022G to SAR (16.8 million) in the
nine-month period ending on September 30, 2023G due to fluctuations in the business volume and estimated value of claims incurred that were
calculated. by the actuary.

5.8.5 Losses in Futile Contracts

Losses due to futile contracts relate to losses arising at any time during the coverage period when facts and circumstances indicate that a group
of contracts is useless. Hence, the Company records a loss in insurance services expenses and increases the remaining coverage liability to the
extent that the current estimates of fulfilled cash meet the specified flows, within the framework of the general measurement model. These
losses were concentrated in the medical sector, the comprehensive vehicle sector, and third-party liability. Losses on futile/void contracts
decreased by 31.9% from SAR (24.8 million) in the nine-month period ending on September 30, 2022G, to SAR (16.9 million) in the nine-
month period ending on September 30, 2023G, as this was mainly caused by turnover volatility.

5.8.6 Exhaustion of Cash Flows to Acquire Insurance

Insurance acquisition cash flow exhaustion primarily represents policy acquisition costs, which were concentrated in the medical, comprehensive
vehicle, and third-party liability sectors. Insurance acquisition cash flow exhaustion increased by 9.6% from SAR (48.8 million) in the nine-
month period ending on September 30, 2022G, to SAR (53.5 million) in the nine-month period ending on September 30, 2023G. This increase
was mainly driven by the significant rise in insurance revenues after due to the increase in the number of insurance policies between the two
mentioned periods.

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5.8.7 Net Revenues/(Expenses) of Reinsurance Contracts
The following table shows the net revenues/(expenses) of reinsurance contracts for the financial period ending on September 30, 2023G, and
the comparative figures for the nine-month period ending on September 30, 2022G.

Table No. (56): Net Revenues/(Expenses) of Reinsurance Contracts

Nine-month Period Ended September 30 Increase/(Decrease)

Thousands Saudi Riyals
2022G Unaudited 2023G Unaudited September2023G

Premium from reinsurance (41,484) (49,518) 14.9%

Recovered claims 2,559 30,857 %1,105.9

Impact of changes on the risk of non-performance (82) (814) %886.8

Changes relating to previous service – settlement of claims incurred (19,262) (3,347) (82.6%)

Total (58,270) (22,822) (60.8%)

As a percentage of the Total

Premium from reinsurance 71.2% 217.0%

Recovered claims (4.4%) (%135.2)

Impact of changes on the risk of non-performance %0.1 3.6%

Changes relating to previous service – settlement of claims incurred 33.1% 14.7%

Total 100.0% 100.0%

Source: Unaudited Financial Statements for the Nine-month Period Ended September 30, 2023G, and Comparative Figures Dated September 30, 2022G.

Net reinsurance expenses consist of reinsurance fees less recoveries from reinsurers.

5.8.8 Assigned/Ceded Premium from Reinsurance

The reinsurance premium represents what has been assigned to reinsurers of the total insurance premiums during the period. The reinsurance
ceded premium did not witness any material change between the nine-month period ending on September 30, 2022G and the nine-month period
ending on 2023G.

5.8.9 Recovered Claims

Total claims recovered increased from SAR (2.6 million) in the nine-month period ending on September 30, 2022G to SAR (30.9 million)
in the nine-month period ending on September 30, 2023G due to a recovered claim in the property sector amounting to SAR (24.0 million).

5.8.10 Changes Related to Previous Service – Settlement of Claims Incurred

Changes related to previous service primarily pertain to claims formerly incurred. These changes decreased by 82.6% from SAR (19.3 million)
in the nine-month period ending on September 30, 2022G, to reach SAR (3.3 million) in the nine-month period ending on September 30, 2023G
due to fluctuation in business volume.

110
5.8.11 Other Operating Expenses
The following table shows other operating expenses for the period ending on September 30, 2023G, and comparative figures for the nine-month
period ending on September 30, 2022G.

Table No. (57): Other Operating Expenses

Nine-month Period Ended September 30 Increase/(Decrease)

Thousands Saudi Riyals
2022G Unaudited 2023G Unaudited September2023G

Employees Expenses/Cost 8,644 6,915 (20.0%)

Professional Expenses 4,181 4,493 7.5%

Repair and maintenance 1,878 1,865 (0.7%)

Board members remuneration and attendance allowances - 1,771 NA

Business trips and transportation 838 464 (44.6%)

Services 1,393 887 (36.3%)

Storage 466 424 (9.1%)

Stationery 154 100 (35.0%)

Other Expenses 1,218 2,274 86.8%

Total 18,772 19,195 2.2%

As a percentage of the Total

Employees Expenses/Cost 46.0% 36.0% 41.0%

Professional Expenses 22.3% 23.4% 22.8%

Repair and maintenance 10.0% 9.7% 9.9%

Board members remuneration and attendance allowances - 9.2% 4.6%

Other Expenses 21.7% 21.6% 21.6%

General and administrative expenses 100.0% 100.0% 100.0%

Source: Unaudited Financial Statements for the Nine-month Period Ended September 30, 2023G, and Comparative Figures Dated September 30, 2022G.

Employees Expenses/Costs
The cost of employees represents the main expense within other indirect operating expenses, as it constituted 46.0% and 36.0% of the total other
operating expenses for the nine-month period ending September 30, 2023G, and the same period ending on September 30, 2022G, respectively.

These costs decreased by 20.0% from SAR (8.6 million) in the nine-month period ending on September 30, 2022G, to SAR (6.9 million) in
the nine-month period ending on September 30, 2023G basically due to the decrease in the average number of employees that reached 238
employees during the nine months ending in 2023G compared to 268 employees during 2022G.

5.8.11.1 Professional Expenses/Fees

Professional fees comprise expenses for the Company’s external auditors.

Expenses for professional fees represented 22.3% and 23.4% of the total other operating expenses for the nine-month period ending on
September 30, 2023G, and the same period ending September 30, 2022G, respectively. Professional fees did not witness any material change
during the aforementioned period.

5.8.11.2 Other Expenses

Other expenses mainly consist of various expenditures, such as government expenses, and subscription expenses related to particular
institutions, such as SIMA, and the head office’s cleaning expenses.

Other expenses increased by 86.8% from SAR (1.2 million) in the nine-month period ending on September 30, 2022G to SAR (2.3 million) in
the same period ending on September 30, 2023G. The recorded rise was within the normal course of business.

111
5.9 Statement of Financial Position
The following table shows the statement of financial position for the financial period ending on September 30, 2023G, and comparative figures
for the financial year ending on December 31, 2022G.

Table No. (58): Statement of Financial Position

Financial Year Ended Nine-month Period

Increase/(Decrease)
December 31 Ended September 30
Thousands Saudi Riyals
2022G Audited 2023G Unaudited September2023G

Assets
Cash and cash equivalents 222,967 173,702 (22.1%)

Term deposits 127,000 185,327 45.9%

Total 349,967 359,030 2.6%

Investments:

Financial assets at FVTPL 50,354 53,537 6.3%

Financial assets measured at fair value through other comprehensive
39,703 39,703 -
income
Prepaid expenses and other assets 26,833 22,572 (15.9%)

Insurance contract assets 579 - (100.0%)

Reinsurance contract assets 33,931 44,035 29.8%

Property and equipment 5,248 4,323 (17.6%)

Right-of-use assets 2,687 1,308 (51.3%)

Intangible assets 6,053 5,273 (12.9%)

Goodwill 25,514 25,514 -

Statutory deposit 21,000 21,000 -

Income due on a statutory deposit 6,026 1,464 (75.7%)

Total 217,929 218,728 0.4%

Total assets 567,895 577,758 1.7%

Liabilities

Accrued expenses and other liabilities 27,734 26,593 (4.1%)

Insurance contracts liabilities 323,256 310,688 (3.9%)

Reinsurance contracts liabilities 2,625 67 (97.4%)

Lease obligations 2,617 1,477 (43.5%)

Due to related parties 1,124 1,124 -

Employee benefits obligations 8,032 7,631 (5.0%)

Zakat payable 42,654 39,899 (6.5%)

Income commission payable to the Saudi Central Bank 6,026 1,464 (75.7%)

Dividends payable 370 370 -

Total liabilities 414,437 389,314 (6.1%)

Equity

Paid-up capital 140,000 140,000 -

Accumulated losses (29,247) 5,739 (119.6%)

reserve for remeasurement of employee benefits obligations 4,925 4,925 -

Fair value reserve for investments 37,780 37,780 -

Net equity 153,458 188,444 22.8%

Total liabilities and equity 567,895 577,758 1.7%

Source: Unaudited Financial Statements for the Nine-month Period Ended September 30, 2023G, and Comparative Figures Dated September 30, 2022G

112
5.9.1 Assets
Assets are limited to cash and cash equivalents and time deposits. At the level of total balance, assets increased by 2.6%, or SAR (9.1 million),
from SAR (350.0 million) as of December 31, 2022G to SAR (359.0 million) as of September 30, 2023G. The aforementioned increase was
mainly driven by a rise in the balance of term deposits by 45.9%, or SAR (58.3 million), from SAR (127.0 million) as of December 31, 2022G,
to SAR (185.3 million) as of September 30, 2023G, as a result of the reclassification of some cash and cash equivalents balances included in
the deposit category, with the aim of achieving a relatively high rate of return on deposits.

5.9.1.2.1 Cash and Cash Equivalents

The following table shows cash and cash equivalents for the financial period ending on September 30, 2023G, and comparative figures for the
financial year ending on December 31, 2022G.

Table No. (59): Cash and Cash Equivalents

Financial Year Ended Nine-month Period

Increase/(Decrease)
December 31 Ended September 30
Thousands Saudi Riyals
2022G Audited 2023G Unaudited September2023G

Cash in hand 49 43 (13.7%)

Cash at banks 60,123 23,862 (60.3%)

Term deposits 78,000 71,200 (8.7%)

Money market fund 84,794 78,598 (7.3%)

Total 222,967 173,702 (22.1%)

Source: Unaudited Financial Statements for the Nine-month Period Ended September 30, 2023G, and Comparative Figures Dated September 30, 2022G

The balance of cash and cash equivalents decreased by 22.1%, or SAR (49.3 million), from SAR (223.0 million) as of December 31, 2022G,
to SAR (173.7 million) as of September 30, 2023G. The decline was generally impacted by the negative cash flows recorded by the Company
during the nine-month period ending on September 30, 2023G, which were primarily related to term deposits.

5.9.1.1 Term Deposits

The balance of term deposits increased by 45.9%, or SAR (58.3 million), from SAR (127.0 million) as of December 31, 2022G, to 1 SAR
(85.3 million) as of September 30, 2023G, as a result of the reclassification of cash and cash equivalents in the deposit category with the aim
of achieving a relatively high rate of return on deposits.

5.9.1.2 Investments
The following table sets forth investments for the financial period ending on September 30, 2023G, and comparative figures for the financial
year ending on December 31, 2022G.

Table No. (60): Investments

Financial Year Ended Nine-month Period

Increase/(Decrease)
December 31 Ended September 30
Thousands Saudi Riyals
2022G Audited 2023G Unaudited September2023G

Financial assets at FVTPL

Investment funds 20,893 17,922 (14.2%)

Ordinary shares 29,462 35,614 20.9%

Total 50,354 53,537 6.3%

Financial assets at fair value through comprehensive income (FVOCI)

Available-for-sale Investments 39,703 39,703 -

Total 39,703 39,703 -

Source: Unaudited Financial Statements for the Nine-month Period Ended September 30, 2023G, and Comparative Figures Dated September 30, 2022G

113
5.9.1.3 Financial Assets at FVTPL
The balance of financial assets at FVTPL increased by 6.3%, or SAR (3.2 million), from SAR (50.4 million) as of December 31, 2022G to
SAR (53.5 million) as of September 30, 2023G, due to profits resulting from the revaluation of those investments on September 30, 2023G.

5.9.1.4 Financial Assets Measured at Fair Value Through Other Comprehensive Income (FVOCI)
The balance of financial assets measured at FVOCI remained stable at SAR (39.7 million) between December 31, 2022G and September 30,
2023G.

5.9.1.5 Prepaid Expenses and Other Assets

The following table shows prepaid expenses and other assets for the financial period ending on September 30, 2023G, and comparative figures
for the financial year ending on December 31, 2022G.

Table No. (61): Prepaid Expenses and Other Assets

Financial Year Ended Nine-month Period

Increase/(Decrease)
December 31 Ended September 30
Thousands Saudi Riyals
2022G Audited 2023G Unaudited September2023G

Advance Lease 15 60 295.4%

Employees accounts receivable 1,327 814 (38.7%)

Other prepaid expenses 3,675 6,463 75.8%

Income due 1,470 233 (84.2%)

Amounts receivable from The Arab War Risks Insurance Syndicate

2,572 2,606 1.3%
(AWRIS)

VAT refunded 2,289 653 (71.5%)

Receivables from Umrah Fund 13,889 10,528 (24.2%)

Bank letter of guarantee 2 1 (36.4%)

Other 1,593 1,213 (23.9%)

Total 26,833 22,572 (15.9%)

Source: Unaudited Financial Statements for the Nine-month Period Ended September 30, 2023G, and Comparative Figures Dated September 30, 2022G

The balance of prepaid expenses and other assets decreased by 15.9%, or SAR (4.3 million), from SAR (26.8 million) as of December 31,
2022G, to SAR (22.7 million) as of September 30, 2023G. The decrease was mainly due to a decline in the balance due from the Umrah Fund,
which dropped by 24.4% or a value of SAR (3.4 million), from SAR (13.9 million) as of December 31, 2022G, to reach SAR (10.6 million)
on September 30, 2023G.

5.9.1.6 Insurance Contract Assets

The balance of insurance contract assets decreased from SAR (0.6 million) as of December 31, 2022G, to zero as of September 30, 2023G as
a result of ongoing collections.

5.9.1.7 Reinsurance Contract Assets

The balance of reinsurance contract assets increased by 29.8% from SAR (33.9 million) as of December 31, 2022G, to SAR (44.0 million) as
of September 30, 2023G due to overall higher business volumes.

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5.9.1.8 Property and Equipment
The following table shows details of property and equipment for the financial period ending on September 30, 2023G, and comparative figures
for the financial year ending on December 31, 2022G.

Table No. (62): Property and Equipment

Financial Year Ended Nine-month Period

Increase/(Decrease)
December 31 Ended September 30
Thousands Saudi Riyals
2022G Audited 2023G Unaudited September2023G

Vehicles - - NA

Computers 1,111 729 (%34.3)

Furniture, Fixtures, and Equipment (FF&E) 2,261 1,938 (%14.3)

Leasehold improvements 1,877 1,655 (%11.8)

Total 5,248 4,323 (17.6%)

Source: Unaudited Financial Statements for the Nine-month Period Ended September 30, 2023G, and Comparative Figures Dated September 30, 2022G

The balance of property and equipment did not witness any material change between December 31, 2022G and September 30, 2023G. Rather,
a partial decrease of 17.6%, or SAR (0.9 million), was recorded from SAR (5.2 million) as of December 31, 2022G to SAR (4.3 million) as of
September 30, 2023G.

5.9.1.9 Right-of-use Assets

The following table shows right-of-use assets for the financial period ending on September 30, 2023G and comparative figures for the financial
year ending on December 31, 2022G.

Table No. (63): Right-of-use Assets

Financial Year Ended Nine-month Period

Increase/(Decrease)
December 31 Ended September 30
Thousands Saudi Riyals
2022G Audited 2023G Unaudited September2023G

Point of sale buildings 907 155 (82.9%)

Main buildings offices 1,780 1,153 (35.3%)

Total as of December 31 2,687 1,308 (51.3%)

Source: Unaudited Financial Statements for the Nine-month Period Ended September 30, 2023G, and Comparative Figures Dated September 30, 2022G

The balance of the right-of-use assets decreased by 51.3%, or SAR (1.4 million), from SAR (2.7 million) as of December 31, 2022G to SAR
(1.3 million) as of September 30, 2023G as a result of continuous amortization.

5.9.1.10 Intangible Assets

The following table shows intangible assets for the financial period ending on September 30, 2023G, and comparative figures for the financial
year ending on December 31, 2022G.

Table No. (64): Intangible Assets

Financial Year Ended Nine-month Period

Increase/(Decrease)
December 31 Ended September 30
Thousands Saudi Riyals
2022G Audited 2023G Unaudited September2023G

Computer Programs 6,053 5,273 (12.9%)

Net Total 6,053 5,273 (12.9%)

Source: Unaudited Financial Statements for the Nine-month Period Ended September 30, 2023G, and Comparative Figures Dated September 30, 2022G

The balance of intangible assets decreased by 12.9% from SAR (6.1 million) as of December 31, 2022G to SAR (5.3 million) as of September
30, 2023G as a result of continued amortization within the normal course of business.

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5.9.1.11 Goodwill
The value of goodwill remained constant at SAR (25.5 million) between December 31, 2022G and September 30, 2023G.

5.9.1.12 Statutory Deposit/Revenues Due from a Statutory Deposit

The value of the statutory deposit remained constant at SAR (21.0 million) between December 31, 2022G and September 30, 2023G. Regarding
revenues due from the statutory deposit, they decreased by 75.7%, or SAR (4.5 million), from SAR (6.0 million) as of December 31, 2022G to
SAR (1.5 million) as of September 30, 2023G, as a result of the settlement of balance related to previous periods.

5.9.2 Liabilities
In general, the balance of liabilities decreased by 6.1%, or SAR (25.1 million), from SAR (414.4 million) as of December 31, 2022G to SAR
(389.3 million) as of September 30, 2023G. The decrease was mainly affected by a decrease in the balance of liabilities of insurance contracts,
and a decline in the balance of commission income payable.

5.9.2.1 Accrued Expenses and Liabilities

The following table shows accrued expenses and liabilities for the financial period ending on September 30, 2023G, and comparative figures
for the financial year ending on December 31, 2022G.

Table No. (65): Accrued Expenses and Liabilities

Financial Year Ended Nine-month Period

Increase/(Decrease)
December 31 Ended September 30
Thousands Saudi Riyals
2022G Audited 2023G Unaudited September2023G

VAT payable 5,762 6,659 15.6%

Inspection service and other fees payable 10,038 8,780 (12.5%)

Administrative fees payable to third-party - 132 NA

Other 8,411 11,022 31.1%

Employee benefit payables 200 - (%100.0)

Directors’ remuneration and attendance allowances 3,324 - (%100.0)

Total 27,734 26,593 (4.1%)

Source: Unaudited Financial Statements for the Nine-month Period Ended September 30, 2023G, and Comparative Figures Dated September 30, 2022G

Regarding accrued expenses and other liabilities, the balance did not show any noticeable change, but rather a slight decrease of 4.1%, from
SAR (27.7 million) as of December 31, 2022G to SAR (26.6 million) as of September 30, 2023G as a result of a decrease in inspection services
and other fees payable.

5.9.2.2 Insurance Contract Liabilities

The balance of insurance contract liabilities decreased by 3.9%, or SAR (12.6 million), from SAR (323.3 million) as of December 31, 2022G,
to SAR (310.7 million) as of September 30, 2023G. The aforementioned decrease was impacted by a decrease in the number of claims.

5.9.2.3 Reinsurance Contract Liabilities

The balance of reinsurance contract liabilities decreased by 97.4%, or SAR (2.5 million), from SAR (2.6 million) as of December 31, 2022G,
to SAR (0.1 million) as of September 30, 2023G, after a decrease in the number and scope of claims.

5.9.2.4 Lease Contract Obligations

The lease contract obligation (liability) balance decreased by 43.5%, or SAR (1.1 million), from SAR (2.6 million) as of December 31, 2022G,
to SAR (1.5 million) as of September 30, 2023G, as a result of ongoing payments.

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5.9.2.5 Transactions with Related Parties
The following table displays details of the most important transactions with related parties for the financial period ending on September 30,
2023G, and comparative figures for the financial period ending on September 30, 2022G.

Table No. (66): Transactions with Related Parties

Financial Year Ended Nine-month Period

Increase/(Decrease)
December 31 Ended September 30
Thousands Saudi Riyals
2022G Audited 2023G Unaudited September2023G

a) Details of the main transactions with related parties during the period:

Gross written premiums 1,126 5 (99.5%)

Lease expenses (335) - (100.0%)

Reinsurance commissions income 16 - (100.0%)

Reinsurers’ share of claims paid 243 20 (91.9%)

Assigned/Ceded reinsurance premiums (4) - (100.0%)

Claims incurred 111 - (100.0%)

Total 1,157 25 (97.8%)

Source: Unaudited Financial Statements for the Nine-month Period Ended September 30, 2023G, and Comparative Figures Dated September 30, 2022G

The value of transactions with related parties decreased from SAR (1.2 million) in the nine-month period ending on September 30, 2022G to
SAR (25,000) in the nine-month period ending on September 30, 2023G, as a result of a decrease or business interruption with related parties
since the beginning of 2022G.

5.9.2.6 Employee Benefits Obligations

The following table shows employee benefits obligations for the financial period ending on September 30, 2023G, and comparative figures for
the financial period ending on September 30, 2022G.

Table No. (67): Employee Benefits Obligations

Financial Year Ended Nine-month Period

Increase/(Decrease)
December 31 Ended September 30
Thousands Saudi Riyals
2022G Audited 2023G Unaudited September2023G

January 1 9,204 8,032 (12.7%)

Loaded during the year 2,125 1,415 (33.4%)

Paid during the year (1,748) (1,816) 3.9%

Evaluation of commitments (1,550) - (100.0%)

December 31 8,032 7,631 (5.0%)

Source: Unaudited Financial Statements for the Nine-month Period Ended September 30, 2023G, and Comparative Figures Dated September 30, 2022G

The balance of employee benefits obligations decreased by 5.0%, or SAR (0.4 million), from SAR (8.0 million) as of December 31, 2022G, to
SAR (7.6 million) as of September 30, 2023G, as a result of a number of resignations handed in during this period.

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5.9.2.7 Accrued Zakat (Due)
The following table shows accrued Zakat for the financial period ending on September 30, 2023G and comparative figures for the financial
year ending on December 31, 2022G.

Table No. (68): Zakat Due

Financial Year Ended Nine-month Period

Increase/(Decrease)
December 31 Ended September 30
Thousands Saudi Riyals
2022G Audited 2023G Unaudited September2023G

As of January, 1 42,652 42,654 0.0%

Allocations:

For the current period/year 3,678 4,200 %14.2

Amendments relating to previous years 922 - (100.0%)

Total 4,600 4,200 (8.7%)

Paid during the year and period (4,599) (6,955) 51.2%

As of December 31, 42,654 39,899 (6.5%)

Source: Unaudited Financial Statements for the Nine-month Period Ended September 30, 2023G, and Comparative Figures Dated September 30, 2022G

Accrued Zakat expenses decreased by 6.5%, or SAR (0.4 million), from SAR (8.0 million) as of December 31, 2022G, to SAR (7.6 million) as
of September 30, 2023G, within the normal course of business.

5.9.2.8 Income Commission Payable to the Saudi Central Bank

The following table shows the income commission payable to the Saudi Central Bank for the financial period ending on September 30, 2023G,
and the comparative figures for the financial year ending on December 31, 2022G.

Table No. (69): Income Commission Payable to the Saudi Central Bank

Financial Year Ended Nine-month Period

Increase/(Decrease)
December 31 Ended September 30
Thousands Saudi Riyals
2022G Audited 2023G Unaudited September2023G

Commission income payable to the Saudi Central Bank 6,026 1,464 (75.7%)

6,026 1,464 (75.7%)

Source: Unaudited Financial Statements for the Nine-month Period Ended September 30, 2023G, and Comparative Figures Dated September 30, 2022G

The value of commission income payable to the Saudi Central Bank decreased by 75.7%, or SAR (4.5 million), from SAR (6.0 million) as of
December 31, 2022G to SAR (1.5 million) as of September 30, 2023G, after the Company settled the previous periods’ balances.

5.9.2.9 Dividends Payable

The amount of dividends payable remained constant between December 31, 2022G and September 30, 2023G.

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5.10 Statement of Cash Flows
The following table shows the statement of cash flows for the financial period ending on September 30, 2023G, and the comparative figures
for the financial year ending on December 31, 2022G.

Table No. (70): Statement of Cash Flows

Financial Year Ended Nine-month Period

Increase/(Decrease)
December 31 Ended September 30
Thousands Saudi Riyals
2022G Audited 2023G Unaudited September2023G

Cash flows from operating activities

Total loss for the year before allocating surplus and zakat (55,267) 39,186 (170.9%)

Adjustments to non-cash items: NA

Depreciation of property and equipment 579 934 61.3%

Depreciation of the right-of-use assets 1,358 1,130 (%16.8)

Amortization of Intangible assets 380 965 153.7%

Financing interest for lease contracts obligations 48 23 (52.3%)

Gain on disposal of property and equipment - (14) NA

Net profit on financial assets measured at FVTPL (1,134) (6,447) 468.7%

Provision for employee benefits obligations 1,519 1,415 (6.8%)

Changes in operating assets and liabilities:

Prepaid expenses and other assets (10,318) 4,262 (141.3%)

Accrued expenses and other liabilities 15,870 (1,127) (107.1%)

Income due on a statutory deposit (278) 4,563 (1,740.4%)

income commission payable to the Saudi Central Bank 278 (4,563) (1,740.4%)

Change in insurance contract assets - 579 NA

Change in reinsurance contract assets 21,972 (10,104) (146.0%)

Change in insurance contract liabilities (43,428) (12,568) (71.1%)

Change in reinsurance contract liabilities 129 (2,558) (2,079%)

Cash generated from/ (used in) operating activities (68,291) 15,675 (%123.0)

Paid employee benefits obligations (1,610) (1,816) 12.8%

Financing interest paid for lease contracts obligations (48) (23) (52.3%)

Zakat paid (4,599) (6,955) 51.2%

Net cash generated from operating activities (74,547) 6,881 (109.2%)

Cash flows from investing activities

Term Deposits (42,233) (200,327) 374.3%

Monetization of Term Deposits 66,250 142,000 114.3%

Purchase of financial assets at FVTPL (54,536) (12,188) (77.7%)

Proceeds from disposal of financial assets at FVTPL 90,607 15,452 (82.9%)

Payments for the purchase of property and equipment (1,131) (14) (98.8%)

Purchase of intangible assets (1,139) (185) (83.7%)

Proceeds from disposal of property and equipment - 19 NA

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 Financial Year Ended Nine-month Period
Increase/(Decrease)
December 31 Ended September 30
Thousands Saudi Riyals
2022G Audited 2023G Unaudited September2023G

Net cash used in investing activities 57,818 (55,243) (195.5%)

Cash flows from financing activities

Payments for lease fundamental items (1,203) (903) (25.0%)

Net decrease in cash and cash equivalents (17,932) (49,264) 174.7%

Cash and cash equivalents at the beginning of the period 288,218 222,967 (22.6%)

Cash and cash equivalents at the end of the period 270,286 173,702 (35.7%)
Source: Unaudited Financial Statements for the Nine-month Period Ended September 30, 2023G, and Comparative Figures Dated September 30, 2022G.

5.10.1 Net Cash Used in Operating Activities

Regarding operational activities, the Company recorded a negative cash flow of SAR (74.5 million) during the nine-month period ending on
September 30, 2022G, as a result of losses amounting to SAR (55.3 million) during the aforementioned period. The Company then achieved
positive cash flows during the nine-month period ending on September 30, 2023G, driven mainly by the profits recorded during that period,
which amounted to SAR (39.2 million) during the period.

5.10.2 Net cash Generated from Investing Activities

The Company recorded positive cash flows from investing activities amounting to SAR (57.8 million) in the nine-month period ending
September 30, 2022G, as a result of the liquidation of time deposits, and the disposal of financial assets at FVTPL amounting to SAR (156.9
million). On the other hand, the Company registered negative cash flows of SAR (22.2 million) in the nine-month period ending on September
30, 2023G, as a result of tying up term deposits worth SAR (200.3 million).

5.10.3 Net Cash used in Financing Activities

Negative cash flows from financing activities were associated with capital lease payments related to leased buildings and sales centers and
amounted SAR (0.9 million) and SAR (1.9 million) in the nine-month period ending September 30, 2023G, and the comparative figures period
ending on September 30, 2022G, respectively.

5.11 Capital Obligations and Other Contingent Liabilities

Lawsuit
The Company operates in the insurance sector and is exposed to lawsuits in the ordinary course of business with respect to the claims of
insurance policyholders. While the final results of all pending or risky lawsuits cannot be predicted or determined in a practical manner, the
Company does not believe that such lawsuits (including legal proceedings) will have a material impact on its results of operations or financial
position.

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6. Use of Offer Proceeds

6.1 Net Offer Proceeds

The total proceeds of the Rights Issue Offering are one hundred and sixty million (160,000,000) Saudi Riyals, of which (6,925,000) Saudi
Riyals will be paid to cover the offering expenses, which include the fees of the financial advisor, lead manager, legal advisor, underwriting
manager, media and public relations advisor, in addition to underwriting expenses, marketing, printing expenses, distribution and other
expenses related to subscription. Accordingly, the net proceeds of the offering will amount to (153,075,000) Saudi Riyals, which will be used
to support the Company’s future plans and enhance the margin of its financial solvency.

This will be done by using the subscription proceeds to (increase the statutory deposit, invest in debt instruments, increase bank deposits, and
replace the technical system for insurance and financial operations).

The Company will also disclose to the public on the Saudi Tadawul website when there is a difference of (5%) or more between the actual uses
of the proceeds of the offering against what was disclosed in this Prospectus as soon as it becomes aware of that in accordance with paragraph
(f) of Article (72) of the Rules on the Offer of Securities and Continuing Obligations, which stipulate that “The Issuer must, in the event of any
difference of 5% or more between the actual use of the proceeds from a rights issue or a share issuance with the suspension of preemptive rights
and the planned use of proceeds that was disclosed in the relevant prospectus, disclose such discrepancy to the public as it becomes aware of
such discrepancy”.

6.2 Use of Net Offer Proceeds

All insurance Companies operating in the Kingdom carry out their activities in accordance with the Cooperative Insurance Companies Control
Law and its Implementing Regulations, and subsequent amendments issued by the Saudi Central Bank from time to time.

On 28/02/1445H (corresponding to 13/09/2023G), the Board of Directors recommended increasing the Company’s capital by offering Rights
Issue Shares worth of one hundred and sixty million (160,000,000) Saudi Riyals, in compliance with the minimum required capital of insurance
Companies and to support the Company’s future plans, and financial solvency margin, conditional on obtaining the approval of the Saudi
Central Bank, the CMA, and Saudi Tadawul, in addition to the approval of the EGA. Knowing that all continuing obligations, in accordance
with the requirements of the Saudi Central Bank, are now towards the Insurance Authority, to which its powers were transferred, which
officially started its work on 09/05/1445H (corresponding to 23/11/2023G) to regulate, supervise and control the insurance sector in the
Kingdom. Therefore, The Company obtained the Insurance Authority’s no-objection on the capital increase according to letter No. (134-23)
dated 26/05/1445H (corresponding to 10/12/2023G).

Net Offering Proceeds will be mainly used to support the Company’s business and enhance its solvency margin while complying with the
solvency requirements which are imposed by the Saudi Central Bank on all insurance Companies operating in the Kingdom of Saudi Arabia.
Such will be done by using the subscription proceeds to (increase the statutory deposit, invest in debt instruments, increase bank deposits, and
the technical system for insurance and financial operations), and shareholders will not receive any of the subscription proceeds.

The below table outlines the suggested use of Offering Proceeds:

Table No. (71): Suggested Use of the Offer Proceeds

Description Amount (SAR) Percentage* of Total Offer Proceeds (%)

Increase of the Statutory Deposit 9,000,000 5.6%

Investment in debt instruments 50,000,000 31.3%

Increase in bank deposits 79,075,000 49.4%

Replacement of the technical system for insurance and financial operations 15,000,000 9.4%

Estimated offering expenses 6,925,000 4.3%

Total Proceeds of the Offering 160,000,000 100.0%

Source: The Company
*These percentages are approximate.

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The Company will use the Offer Proceeds as follows:

6.2.1 Use of Net Offer Proceeds to Increase the Statutory Deposit

Pursuant to the Implementing Regulations of the Cooperative Insurance Companies Control Law issued by the Saudi Central Bank, the
statutory deposit should be 10% of the paid-up share capital. The Saudi Central Bank, may raise such percentage to a maximum of fifteen
percent (15%) according to the risks that the Company may face. Accordingly, the Company will allocate nine million (9,000,000) Saudi Riyals
from the Net Offering Proceeds as statutory deposit. The total statutory deposit will be thirty million (30,000,000) Saudi Riyals as (10%) of
the company’s capital after the capital increase so that the current regular deposit becomes twenty-one million (21,000,000) Saudi Riyals. This
is after the Insurance Authority agreed to reduce the statutory deposit ratio in view of the risks faced by the company based on its request.

6.2.2 Use of Net Offer Proceeds for Investments and Deposits

The Company will use the fifty million (50,000,000) Saudi Riyals of the net Offering Proceeds to invest in debt instruments and seventy-nine
million and seventy-five thousand (79,075,000) Saudi Riyals to increase bank deposits.

It is worth mentioning that the amounts will be distributed to investment channels in accordance with Article Sixty-One (61) of the Implementing
Regulations of the Cooperative Insurance Companies Control Law, which states the following:

1. The Company shall, when formulating its investment policy, take into consideration that the maturity of its invested assets
equals its liabilities according to the issued policies. The Company shall provide the Saudi Central Bank with an investment
policy that include the assets distribution. If such investment policy was not approved by Saudi Central Bank, the Company
shall adhere to the investment standards in Table (1) of the Implementing Regulations, provided that investments outside the
Kingdom shall not exceed 20% of the total investment and in accordance with paragraph (2) of Article (59) which states that
the Company shall invest (50%) of its total invested assets in Saudi Riyals. If the Company wishes to reduce this percentage,
it should receive the prior written approval of Saudi Central Bank.
2. The Company shall take into consideration the investment concentration risks, so that the concentration percentage does not
exceed (50%) of each investment in Table (1) of the Implementing Regulations.

According to Article (62) of the Implementing Regulations of the Cooperative Insurance Companies Control Law, the Company shall not use
financial instruments, such as derivatives and off-balance-sheet items prior to the obtainment of the prior written approval of Saudi Central
Bank. The Company is permitted to invest in such instruments when the following conditions are met:

1. It must be listed on a major financial market, capable of liquidation in a short time, built on assets listed in the asset valuation
table, and has a clear and known pricing method. Such derivatives must be listed on financial exchange, are capable of being
readily closed out, are based on underlying admissible assets and have a prescribed pricing basis.
2. The Company has set aside assets that can be used to settle any obligations under these derivatives and set adequate provisions
for any adverse changes on the derivatives and their coverage.
3. The counter party must be reputable and in an acceptable financial condition.

It is worth noting that the Company has current outstanding investments (for more information, please refer to subparagraph (5.5.9) “Financial
Assets at Fair Value Through Profit or Loss (FVTPL)” from paragraph (5.5) “Statement of Financial Position” from Section (5) “Financial
Information and Management Discussion and Analysis”.

In line with the requirements of Paragraph (f) of Article (72) of the Rules on the Offer of Securities and Continuing Obligations, the Company
will disclose to the public any discrepancy of (5%) or more between the actual use of the Proceeds from a Rights Issue or share issuance against
what was disclosed in this Prospectus as it becomes aware of such discrepancy.

6.2.3 Using the net proceeds from the offering to replace the technical system for insurance
and financial operations
The Company will use an amount of fifteen million (15,000,000) Saudi Riyals from the net proceeds of the offering to replace the technical
system for insurance and financial operations aiming to meet the information security requirements stated by the Insurance Authority, in
addition to increasing the Company’s general productivity as a result of increasing the smoothness of internal operations, automating its
operations and providing business and data analysis capabilities. The Company will also be able to develop electronic sales channels, the table
below shows the main stages and timeline for project implementation:

Table No. (72): The expected timetable for using the Offer Proceeds to replace the technical system for insurance and financial
operations

2024G 2025G
The project
Third quarter The fourth quarter First Quarter

Replacement of the technical - Install system software

Planning and preparing the new
system for insurance and financial Final testing and system activation
system - System testing and staff training
operations

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Source: The Company

6.2.4 The Effect of the Capital Increase on the Solvency Margin

The Company aims to increase its capital from one hundred and forty million (140,000,000) Saudi Riyals to three hundred million (300,000,000)
Saudi Riyals to support the growth of its business, by using the Offering Proceeds in Financial Investments (within the traditional activities of
the Company) and increasing the Statutory Deposit.

The Implementing Regulations of the Cooperative Insurance Companies Control Law require insurance companies to maintain a minimum
level of admissible net assets recognizable in the solvency margin account. This requirement translates into the need to maintain a minimum
amount of the full solvency margin (100%) (net admissible assets divided by the minimum solvency margin).

As per the article (65) of the Implementing Regulations of the Cooperative Insurance Companies Control Law, the Saudi Central Bank requires
insurance companies to value its assets for the purpose of calculating solvency margin in accordance with the specific tables and percentages
of inclusion issued by Saudi Central Bank, taking into account the following:

- Market value shall not be exceeded in the valuation process and shall all assets linked to Investment part of the Protection
and Savings insurance policy shall be excluded.
- Maximum limit of 20% of the total assets value in any one-asset category.
Article (66) of the Implementing Regulations of the Cooperative Insurance Companies Control Law states that the Company, in respect to its
general health insurance business, shall maintain a margin of solvency equivalent to the highest of the following three amounts:

- Minimum capital requirements, which is one hundred million (100,000,000) SAR for insurance Companies and two hundred
million (200,000,000) SAR for reinsurance Companies or insurance Companies that are engaged in reinsurance operations.
- Gross Premiums Written
- Claims
The following table outlines the Solvency Statement (Margin/Cover) as of December 31, 2020G, 2021G, 2022G, and the nine-month period
ending on September 30, 2023G:

Table No. (73): The Company margin and solvency cover

(SAR) December 31, 2020G December 31, 2021G December 31, 2022G September 30, 2023G

Minimum capital requirements 100,000,000 100,000,000 100,000,000 100,000,000

Total premium solvency margin 59,866,300 74,548,170 75,487,620 79,141,870

Total claims solvency margin 77,909,398 88,315,622 93,295,063 20,637,687

Minimum required solvency margin 100,000,000 100,000,000 100,000,000 100,000,000

Net admissible assets 177,469,240 120,797,652 72,639,858 100,291,009

Increase (deficit) in net admissible assets

compared to the minimum required solvency 77,469,240 20,797,652 (27,360,142) 291,009
margin

Solvency margin (%) 177.5% 120.8% 72.6% 100.3%

Source: The Company

It is to be noted that the Company is committed to submitting a corrective plan to the Saudi Central Bank in February 2023, outlining the
steps it will take to improve its financial solvency, including the necessary time period, in accordance with Paragraph (B) of Article (68) of the
Implementing Regulations of the Cooperative Insurance Companies Control Law. The Company has achieved the minimum solvency margin
during the third quarter of 2023.

The following are the expected contributions of the net Offering Proceeds in order to maintain capital requirements for the coming years, which
were calculated based on certain requirements imposed by the Saudi Central Bank on insurance Companies:

Table No. (74): Expected Contribution of the Net Offer Proceeds to Maintain Financial Solvency Requirements

December 31, December 31, December 31, December 31, December 31, December 31,
(SAR)
2023G 2024G 2025G 2026G 2027G 2028G

Minimum capital required 100,000,000 100,000,000 100,000,000 100,000,000 100,000,000 100,000,000

Total solvency margin for premiums 74,000,000 84,000,000 91,000,000 98,000,000 106,000,000 115,000,000

Total solvency margin for

46,000,000 37,000,000 37,000,000 40,000,000 43,000,000 46,000,000
requirements

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 December 31, December 31, December 31, December 31, December 31, December 31,
(SAR)
2023G 2024G 2025G 2026G 2027G 2028G

The minimum required solvency

100,000,000 100,000,000 100,000,000 100,000,000 106,000,000 115,000,000
margin
Net assets includable in financial
118,000,000 305,000,000 344,000,000 391,000,000 446,000,000 500,000,000
solvency
An increase (deficit) in acceptable
net assets compared to the minimum 18,000,000 205,000,000 244,000,000 291,000,000 340,000,000 385,000,000
required solvency margin

Solvency margin cover (%) 118.0% 305.0% 344.0% 391.0% 420.8% 434.8%
Source: The Company

The below table outlines the expected timetable for using the Offer Proceeds:

Table No. (75): The expected timetable for using the Offer Proceeds

2024G 2025G
Percentage of total
Statement Total (SAR)
Offer Proceeds (%)
Third Quarter Fourth Quarter First Quarter

Increase the statutory deposit 9,000,000 - - 9,000,000 5.6%

Investing in debt instruments 50,000,000 - - 50,000,000 31.3%

Increase bank deposits 79,075,000 - - 79,075,000 49.4%

Replacement of the technical system for

4,500,000 7,500,000 3,000,000 15,000,000 9.4%
insurance and financial operations

Estimated offering expenses 6,925,000 - - 6,925,000 %4.3

Total proceeds from the offering 149,500,000 7,500,000 160,000,000 100.0%

3,000,000
Source: The Company

It should be noted that the above-mentioned provisions will be financed from the proceeds of the offering.

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7. Statements by Experts

The Advisors whose names appear on pages (vii) and (viii), have given their written consents to include their names, addresses and logos and
statements in the form and content included in this Prospectus and have not withdrawn such consent until the date of this Prospectus.

The Advisors or any of their employees or relatives do not have any shares or interest of any kind in a way that may affect their independence
as of the date of this Prospectus.

125
8. Declarations of Board Members

As of the date of this Prospectus, the Board members declare that:

1. There has not been any interruption in the business of the Issuer which may have a significant effect on the financial position
in the last 12 months.
2. No commissions, discounts, brokerages or other non-cash compensation have been granted within three years immediately
preceding the application for registration and offer of securities that are subject to this Prospectus in connection with the issue
or offer of any securities by the Issuer.
3. Other than what has been mentioned in sub-section No. (3.2) “Major Changes in the Company’s Capital” of Section No.
(3) “Company Overview and Nature of Business” in relation to the reduction of the Company’s capital on page (32) of this
Prospectus, there has not been any material adverse change in the financial or trading position of the Issuer during the three
years immediately preceding the date of submitting the registration application and offering the securities subject to this
prospectus, in addition to the period covered by the certified public accountant’s report until the approval of the prospectus.
4. Other than what has been mentioned in sub-section No. (4.2) “Board of Directors” of Section No. (4) “Organizational and
Administrative structure” on page (42) of this Prospectus, the Board members do not have any shareholding or interest of
any kind in the Issuer, and nor does any of their relatives.
5. The Company did not maintain treasury shares, and the Company’s EGA did not approve the purchase of the Company’s
shares.

126
9. Legal Information

9.1 Company Overview

9.1.1 Company’s Trade Name

The Company was registered in the Commercial Registry of Joint Stock Companies in the city of Al Khobar under the trade name of “Al Sagr
Cooperative Insurance Company” which is the current trade name of the Company. There has been no amendment to said trade name until the
date of this Prospectus.

9.1.2 Company’s Incorporation and Capital Development Phases

- Al Sagr Cooperative Insurance Company has been incorporated as a Joint Stock Company by (17) Saudi and Gulf shareholders
in the city of Riyadh in the Kingdom of Saudi Arabia with a paid-up capital of two hundred million (200,000,000) Saudi
Riyals divided into twenty million (20,000,000) ordinary shares with a nominal value of ten (10) Saudi Riyals per share.
The founding shareholders’ ownership amounted to one hundred and sixteen million (116,000,000) Saudi Riyals, divided
into eleven million and six hundred thousand (11,600,000) ordinary shares, while eight million and four hundred thousand
(8,400,000) ordinary shares, with a total value of (84,000,000) Saudi Riyals were subscribed by the public.
- On 15/02/1428H (corresponding to 05/03/2007G), the Ministerial Resolution No. (63) was issued approving the license
with respect to the incorporation of a joint stock company under the trade name of Al Sagr Cooperative Insurance Company.
- On 16/02/1428H (corresponding to 06/03/2007G), the Royal Decree No. (M/11) was issued approving the incorporation
of the Company, pursuant to which the Ministerial Resolution approving the incorporation of the Company was approved.
- On 03/02/1429H (corresponding to 10/02/2008G), all of the Company’s shares were registered and listed on the Saudi
Stock Exchange (Tadawul), and trading in its shares began upon the obtainment of the Authority’s approval to publish the
Prospectus dated 08/10/1428H (corresponding to 20/10/2007G).
- On 15/02/1430H (corresponding to 10/02/2009G), the Company announced the relocation of its head office from the city of
Riyadh to the city of Al Khobar. The Commercial Registration number has been amended accordingly from (1010243765) to
(2051036871) on 22/03/1429H (corresponding to 30/03/2008G).
- The Company obtained a license from the Saudi Central Bank to carry out insurance business (insurance in the branches
of general and health insurance) in the Kingdom of Saudi Arabia under number (TMN/13/20083) dated 23/03/1429H
(corresponding to 31/03/2008G).
- On 26/06/1434H (corresponding to 06/05/2013G), the EGA approved an increase in the Company’s capital by fifty million
(50,000,000) Saudi Riyals by granting a free share for every (4) outstanding shares, provided that the value of the increase
is paid in the capital by transferring fifty million (50,000,000) Saudi Riyals from retained earnings, so that the Company’s
capital becomes two hundred and fifty million (250,000,000) Saudi Riyals, based on the recommendation of the Board of
Directors on 20/04/1434H (corresponding to 02/03/ 2013G) and the Saudi Central Bank’s no-objection.
- On 16/11/1439H (corresponding to 29/07/2018G), the EGA approved an increase in the Company’s capital by one hundred
fifty million (150,000,000) Saudi Riyals by granting (3) bonus shares for every (5) outstanding shares, provided that the
capital increase shall be paid by capitalizing the amount of one hundred and fifty million (150,000,000) Saudi Riyals (the
amount of one hundred and nineteen million (119,000,000) Saudi Riyals from the retained earnings account, and the amount
of thirty-one million (31,000,000) Saudi Riyals from the Statutory Reserve), so that the Company’s capital becomes four
hundred million (400,000,000) Saudi Riyals, based on the recommendation of the Board of Directors issued on 14/08/1439H
(corresponding to 30/04/2018G) and the Saudi Central Bank’s no-objection.
- On 10/03/1442H (corresponding to 27/10/2020G), the OGA approved the use of the Statutory Reserve balance in the amount
of forty-seven million three hundred and forty-two thousand two hundred and two (47,342,202) Saudi Riyals to amortize part
of the accumulated losses recorded in the balance as of 30/06/2020G and amounting to one hundred and seven million five
hundred and eighty-six thousand seven hundred and five (107,586,705) Saudi Riyals representing (26.8%) of the Company’s
paid-up capital equal to four hundred million (400,000,000) Saudi Riyals. Accordingly, accumulated losses decreased after
amortization and reached sixty million two hundred and forty-four thousand five hundred and three (60,244,503) Saudi
Riyals accounting for (15%) of the Company’s capital.
- On 01/12/1443H (corresponding to 30/06/2022G), the Company’s accumulated losses amounted to (65%) and amounted to
two hundred sixty million and eighty-two thousand and nine hundred four (260,082,904) Saudi Riyals. Hence, the Company
became subject to the application of the procedures and instructions related to listed companies, with accumulated losses

127
 reaching 20% or more of their share capital, in addition to the provisions of the Companies Law of the companies that have
accumulated losses reaching (half) the capital. The announcement of this event was made on 08/02/1444H (corresponding
to 04/09/2022G), after informing the Board of Directors that the accumulated losses have reached this limit on 05/02/1444H
(corresponding to 01/09/2022G).
- On 05/02/1444H (corresponding to 01/09/2022G), the Board of Directors resolved to recommend to the EGA a capital
reduction from four hundred million (400,000,000) Saudi Riyals to one hundred and forty million (140,000,000) Saudi
Riyals, with a reduction percentage of (65%), in order to restructure the Company’s capital and amortize (100%) of the
accumulated losses given that the accumulated losses have reached (65%) of the capital, by canceling twenty-six million
(26,000,000) shares of the Company’s shares. On 24/02/1444H (corresponding to 20/09/2022G), the Company received the
Saudi Central Bank’s letter under No. (44015739) containing its approval to reduce the Company’s capital by two hundred
and sixty million (260,000,000) Saudi Riyals, so that the capital becomes one hundred and forty million (140,000,000)
Saudi Riyals. The Company then submitted a file to the CMA requesting its approval to reduce the capital on 25/02/1444H
(corresponding to 21/09/2022G) and obtained it on 09/03/1444H (corresponding to 05/10/2022G). The EGA, held on
17/03/1444H (corresponding to 13/10/2022G), approved to reduce the Company’s capital from four hundred million
(400,000,000) Saudi Riyals to one hundred and forty million (140,000,000) Saudi Riyals, with a value of two hundred and
sixty million (260,000,000) Saudi Riyals.
- On 28/05/1444H (corresponding to 22/12/2022G), the Company announced a decrease in the value of its accumulated losses
with an equivalent of (12.12%) of its capital.
- On 30/08/1444H (corresponding to 22/03/2023G), the Company signed a binding merger agreement with Gulf
Union Alahlia Cooperative Insurance Company, involving the merger of Al Sagr Insurance Company into Gulf
Union Alahlia Cooperative Insurance Company, through the issuance of sixteen million one hundred and twenty-four one
thousand three hundred and seventeen (16,124,317) new shares in Gulf Union Alahlia Cooperative Insurance Company, in
exchange of all the capital shares of Al Sagr Cooperative Insurance Company, hence Al Sagr Cooperative Insurance Company
was taken over by Alahlia Co., in accordance with the no-objection letter issued by the General Authority for Competition
to complete the Economic Concentration transaction No. (471) issued on 04/07/1444H (corresponding to 26/01/2023G) and
the Saudi Central Bank’s approval on the suggested merger under number (440946454) on 29/12/1444H (corresponding
to 17/07/2023G). On 14/02/1445H (corresponding to 30/08/2023G), the EGA of Shareholders resolved not to approve the
provisions the merger agreement.
- On 28/02/1445H (corresponding to 13/09/2023G), the Board of Directors recommended increasing the Company’s capital by
offering Rights Issue Shares at a value of one hundred and sixty million (160,000,000) Saudi Riyals, in compliance with the
minimum required capital of insurance companies and to support the Company’s future plans, and financial solvency margin,
provided that it obtains the approval of the Saudi Central Bank, the CMA (hereinafter referred to as the “Authority”), and
TADAWUL, in addition to the approval of the EGA. The Company received the non-objection of the Insurance Authority
to increase the capital pursuant to letter No. (134-23) dated 26/05/1445H (corresponding to 10/12/2023G) valid for one year
from its issuance date.

9.1.3 Capital and Statutory Deposit

Paid-up Capital
- Article (8) of the Bylaws specifies the Company’s capital at one hundred and forty million (140,000,000) Saudi Riyals,
divided into fourteen million (14,000,000) shares of equal value with a nominal value of ten (10) Saudi Riyals per share.
- According to Article (9) of the Bylaws, Shareholders subscribed for the entire capital of the Company and the full value was
paid.

Statutory Deposit
- According to Article (14) of the Cooperative Insurance Companies Control Law, and Article (58) of its Implementing
Regulations, a Statutory Deposit must be deposited in a local bank for the order of the Saudi Bank, provided that the
percentage of the Statutory Deposit is (10%) of the paid-up capital, and the Central Bank may raise this percentage to a
maximum of (15%) according to the risks faced by the Company, which must deposit the amount of the Statutory Deposit
within three months from the date of being granted the license in the bank specified by the Central Bank at the time, it is then
invested by the Central Bank, which also benefits from its returns.
- In accordance with the instructions of the Central Bank regarding the presentation of the Statutory Deposit and its returns in
the financial statements issued on 21/05/1437H (corresponding to 01/03/2016G), the Company recognized the commissions
due on the Statutory Deposit as of December 31, 2021G as an asset and a liability in these financial statements. During the
year ending on December 31, 2022G, the Company liquidated Statutory Deposits amounting to (19.0) million Saudi Riyals,
which was accounted for as a reduction in its capital.

9.1.4 Substantial Shareholders

- As of the date of this Prospectus, there is one substantial Shareholder whose percentage exceeds (5%) of the Company shares,
which is Al Sagr National Insurance Company (an Emirati public joint stock company) owning three million six hundred and
forty thousand (3,640,000) shares representing (26%) of the Company’s total shares.
- In accordance with Article (38) of the Implementing Regulations of the Cooperative Insurance Companies Control Law, the
Company has to abide by continuing obligations in terms of informing the Saudi Central Bank of the ownership percentage

128
 of any person who owns (5%) or more of its shares through a quarterly report that it prepares. Al Sagr National Insurance
Company has also to notify the Saudi Central Bank in writing of its ownership percentage and any change thereof within (5)
days of the date of this occurrence of such event.

9.1.5 Head Office

- According to Article (5) of the Bylaws, the Company’s head office is in the city of Dammam in the Kingdom of Saudi Arabia.
It is permissible, by decision of the EGA the head office to transfer the head office to any other city in the Kingdom with the
approval of the Saudi Central Bank. The Company may establish branches, offices or agencies inside or outside the KSA after
obtaining approval of the Saudi Central Bank.
- The company’s head office is located in Dammam area, First floor, ATCO Building, King Khalid Street, Postal code: Al
Khobar 31952, P.O. box 3501.
- As of the date of this Prospectus, the Company has (10) branches inside the KSA and does not have any branch outside it.

9.1.6 Company’s Term

- Article (6) of the Bylaws states that the Company’s term shall be (99) Gregorian years starting from the date of its registration
in the Commercial Register and may be extended by a decision issued by the EGA at least one year prior the expiration of
its term.
- The Commercial Registration Certificate indicates that the Company’s term expired on 16/01/1531H (corresponding to
11/01/2107G).

9.1.7 Company’s Activities

- According to Article (3) of the Bylaws, the Company’s objectives are: practicing cooperative insurance business and
related businesses and all related activities, such as reinsurance, agencies, representation, correspondence or mediation. The
Company may carry out all necessary business activities to achieve its purposes, whether in the field of insurance, funds’
investment, or own and move fixed and cash funds, sell, exchange, lease them directly or through companies it establishes or
purchases, or within partnership with other parties. The Company carries out activities in accordance with the Cooperative
Insurance Companies Control Law and its Implementing Regulations, and all applicable laws and rules in the Kingdom of
Saudi Arabia, upon obtaining the necessary licenses from relevant authorities, if any.
- The Company’s activities, according to the Commercial Register’s Certificate are: health insurance, and general insurance.
- The Company carries out its activities through its head office, which it established in the Kingdom in accordance with the
applicable regulations and upon obtaining the necessary licenses from relevant authorities. The Company has received the
final approval of the Central Bank to carry out its insurance activity (For more information, please refer to Section (9.5)
“Government Approvals, Licenses and Certificates”).

9.1.8 Bylaws
- The current version of the Company’s Bylaws was issued based on the EGA resolution held on 17/03/1444H (corresponding
to 13/10/2022G), and was adopted by the Ministry of Commerce (Corporate Governance Directorate) on 09/07/1444H
(corresponding to 31/01/2023G). It should be noted that the Company did not amend the By-laws in accordance with the new
Companies Law issued by Royal Decree No. (G/132) dated 12/01/1443H (corresponding to 30/06/2022G). The Company is
also committed to uploading an updated version of its Bylaws on its page on Tadawul website.
- The Bylaws have been amended several times as follows:
1. The Company’s capital upon incorporation amounted to two hundred million (200,000,000) Saudi Riyals divided into
twenty million (20,000,000) ordinary shares with a nominal value of ten (10) Saudi Riyals per share. The founders have
subscribed for all the Company’s shares and the full value has been paid.
2. On 26/06/1434H (corresponding to 06/05/2013G), the EGA approved an increase in the Company’s capital by an
amount of fifty million (50,000,000) Saudi Riyals by granting a bonus share for every (4) outstanding shares, provided
that the amount of the increase is paid-in-capital by transferring fifty million (50,000,000) Saudi Riyals from retained
earnings, so that the Company’s capital becomes two hundred and fifty million (250,000,000) Saudi Riyals, based on
the recommendation of the Board of Directors issued on 20/04/1434H (corresponding to 02/03/2013G) and the Saudi
Central Bank’s no-objection.
3. On 20/08/1438H (corresponding to 16/05/2017G), the EGA approved the Bylaws’ amendment to be in line with the
Companies Law issued by Royal Decree No. (M/3) dated 28/01/1437H (corresponding to 11/11/ 2015G).
4. On 16/11/1439H (corresponding to 29/07/2018G), the EGA approved an increase in the Company’s capital by an amount
of one hundred fifty million (150,000,000) Saudi Riyals by granting (3) bonus shares for every (5) outstanding shares,
provided that the capital increase is paid by capitalizing the amount of one hundred and fifty million (150,000,000) Saudi
Riyals (the amount of one hundred and nineteen million (119,000,000) Saudi Riyals from the retained earnings account
and the amount of thirty-one million (31,000,000) Saudi Riyals from the Statutory Reserve), so that the Company’s
capital becomes equal to four hundred million (400,000,000) Saudi Riyals, based on the recommendation of the Board
of Directors issued on 14/08/1439H (corresponding to 30/04/2018G) and the Saudi Central Bank’s non-objection.

129
 5. On 05/02/1444H (corresponding to 01/09/2022G), the Board of Directors decided to recommend to the EGA to reduce
the capital from four hundred million (400,000,000) Saudi Riyals to one hundred and forty million (140,000,000) Saudi
Riyals, by (65 %) in order to restructure the Company’s capital and amortize (100%) of the accumulated losses which
reached (65%) of the capital, by canceling twenty-six million (26,000,000) shares. On 24/02/1444H (corresponding
to 20/09/2022G), the Company received the Saudi Central Bank’s letter No. (44015739) in which its approves the
reduction of the Company’s capital by two hundred and sixty million (260,000,000) Saudi Riyals, so that the capital
becomes one hundred and forty million (140,000,000) Saudi Riyals. Subsequently the Company submitted a file to
the CMA requesting its approval of capital reduction on 25/02/1444H (corresponding to 21/09/2022G), and obtained
it on 09/03/1444H (corresponding to 05/10/2022G). The EGA held on 17/03/1444H (corresponding to 13/10/2022G)
approved the capital reduction from four hundred million (400,000,000) Saudi Riyals to one hundred and forty million
(140,000,000) Saudi Riyals, with a value of two hundred and sixty million (260,000,000) Saudi Riyals.

9.2 Management

9.2.1 Board of Directors

9.2.1.1 Formation of the Board of Directors

- Pursuant to Article (15) of Bylaws, the Company shall be managed by a Board of Directors consisting of seven (9) members
elected by the OGA for a period not exceeding three (3) years, and the composition must reflect sustainable representation of
independent members which in all cases shall not be less than two or one-third of the Board members, whichever is greater.
Such appointment shall not prejudice the right of the legal person to replace someone who represents him in the Board, and
members may be re-elected for similar terms.
- The Company is in compliance with the provisions of the Companies Law in terms of the Board members’ number, which
shall not be less than three (3). The Corporate Governance Regulations for insurance companies state that the number of
members shall not be more than (11) and not less than (5) on a continuous basis. Moreover, the Company is in compliance
with the provisions of Article (16) of the Corporate Governance Regulations, which stipulates that the majority of Board
members of listed companies shall be non-executive directors, and that the number of its independent members shall not
be less than two members or one-third of the Board members whichever is greater, and to Clause (53) of the Companies
Governance Regulations which state that the number of independent members shall not be less than two members, or one-
third of the Board members, whichever is greater, according to the total number of Borad members where the number of
non-executive members is (8) and the number of independent members is (6).
- On 08/05/1445H (corresponding to 22/11/2023G), the OGA approved the election of Board members for its current term,
which starts on 09/05/1445H (corresponding to 23/11/2023G) for a period of three (3) years ending on 12/06/1448H
(corresponding to 22/11/2026G). On 02/03/1445H (corresponding to 17/09/2023G), the Company obtained the Saudi Central
Bank’s approval for the Board candidates during its current term.
- On 11/06/1445H (corresponding to 24/12/2023G), the Board of Directors decided to appoint Mr. Saud Saleh Al-Arifi as
Chairman of the Board, and Mr. Naif Rashed Al-Arfaj as his Deputy Chairman, and the Company obtained the Insurance
Authority’s non-objection on 11/06/1445H (corresponding to 24/12/2023G).

Table No. (76): Board of Directors – Current Session

Indirect
Membership Status Direct Ownership
Ownership
Date of Appointment

Representation
Nationality
Position

Independent /

non-executive
non-indepen-

Name
Age

Ownership

Ownership
Percentage

Percentage
Executive /

Number of

Number of
Shares

Shares
dent

Chairman 09/05/1445H
1- Saud Saleh Non-
of the Saudi 69 Independent (corresponding Himself - - - -
Alarifi Executive
Board to 23/11/2023G)
Vice
09/05/1445H
2- Naif Rashed Chairman Non-
Saudi 34 Independent (corresponding Himself - - - -
Alarfaj of the Executive
to 23/11/2023G)
Board
Al Sagr
3- Sultan 09/05/1445H
Board Non- Non- National
Abdulaziz Saudi 34 (corresponding - - - -
Member Independent Executive Insurance
Alsuwaidi to 23/11/2023G)
Company
4- Yasser 09/05/1445H
Managing Non-
Mohammed Saudi 53 Executive (corresponding Himself 1,000 0.0071429% - -
Director Independent
Alharbi to 23/11/2023G)

130
 Indirect
Membership Status Direct Ownership
Ownership

Date of Appointment

Representation
Nationality
Position

Independent /

non-executive
non-indepen-
Name

Age

Ownership

Ownership
Percentage

Percentage
Executive /

Number of

Number of
Shares

Shares
dent
Al Sagr
5- Abdel 09/05/1445H
Board Non- Non- National
Muhsen Nafez Canadian 51 (corresponding - - - -
Member Independent Executive Insurance
Jaber to 23/11/2023G)
Company
6- Abdullah 09/05/1445H
Board Non-
Sulaiman Saudi 44 Independent (corresponding Himself - - - -
Member Executive
Alhendi to 23/11/2023G)
7- Mohamed 09/05/1445H
Board Non-
Abdulaziz Saudi 72 Independent (corresponding Himself 100 0.0007143% - -
Member Executive
Alnuaim to 23/11/2023G)
09/05/1445H
8- Sami Ahmed Board Non-
Saudi 36 Independent (corresponding Himself - - - -
Albabtin Member Executive
to 23/11/2023G)
09/05/1445H
9- Ahmed Board Non-
Saudi 32 Independent (corresponding Himself - - - -
Khader Albaqshi Member Executive
to 23/11/2023G)
Source: The Company

- According to Article (18) of the Bylaws, taking into account the powers assigned to the GA, the Board of Directors (BOD)
has the broadest powers in managing the Company in order to achieve its objectives. It has the right to participate in other
companies. It is also entitled, within the limits of its jurisdiction, to delegate one or more of its members or third-parties to
carry out specific task(s). It also manages the Company’s affairs and dispose of its assets, properties, and real estate, yet it
shall not sell or mortgage real estate unless upon the approval of the OGA. The Board of Directors may also conclude loans
with government funds, agencies, and institutions whose terms do not exceed the end of the Company’s term, provided
that the following conditions are observed regarding commercial loans whose terms exceed three years: The conditions
of the loans and guarantees provided to the Board of Directors not to harm the Company, its shareholders, and the general
guarantees to the creditors.

9.2.1.2 Chairman, Vice Chairman and Secretary

- In accordance with the Article (20) of the Company’s Bylaws, the Board shall appoint from among its members a Chairman,
a Deputy-Chairman, and a Chief Executive Officer (CEO) and may also appoint a Managing Director of its members. It is
not permissible to combine the position of the Board’s Chairman with any executive position in the Company. The BOD
shall appoint a secretary from its members or others and determines its remuneration. The Chairman shall be responsible for
representing the Company before the judiciary and third parties. He shall also havethe right to appoint others to perform a
specific task(s), as for the Managing Director, he is responsible for the Executive Management of the Company. The BOD
determines the salaries, allowances and remuneration for both the Chairman and the Managing Director in accordance with
Article (22) of the Bylaws.
- The appointment of a Deputy Chairman became mandatory. As for the Managing Director, his appointment is not mandatory.
Moreover, the Company is required to appoint a Secretary for the Board.
- The BOD shall also appoint a CEO from among its members or third parties, and the appointment decision determines his
authorities and remuneration.
- The Chairman has the authority to call the Board to convene a meeting and to preside Board meetings, and the Ordinary and
Extraordinary General Assemblies of Shareholders, in addition to the authorities stipulated in Article (20) of the Bylaws.
- The Company has complied with the Bylaws and the Corporate Governance Regulations regarding mandatory appointments
to these positions after obtaining the necessary approvals for the appointments from the Saudi Central Bank as follows:

Table No. (77): Mandatory Positions of the Board of Directors

Saudi Arabian Monetary Agency (SAMA)/

Position Date of the Board Decision on appointment Appointed Person
Central Bank Approval

Chairman of BOD 11/06/1445H (corresponding to 19/12/2023G) 24/06/1445H (corresponding to 24/12/2023G) Saud Saleh Al-Arifi

Vice Chairman of the

11/06/1445H (corresponding to 19/12/2023G) 24/06/1445H (corresponding to 24/12/2023G) Nayef Rashid Al-Arfaj
Board

131
 Saudi Arabian Monetary Agency (SAMA)/
Position Date of the Board Decision on appointment Appointed Person
Central Bank Approval

Yasser Mohammed Al-

Managing Director 12/07/1445H (corresponding to 25/01/2024G) 04/06/1445H (corresponding to 17/12/2023G)
Harbi

Secretary of the Board* -- -- --

Source: The Company
*As of the date of this Prospectus, the Secretary of the Board of Directors has not been appointed.

9.2.1.3 Board Members Remuneration

- Remunerations are distributed to Board members in accordance with Article (19) of the Company’s Bylaws, so that the
annual remuneration for the Chairman and members of the Board of Directors consists of a minimum amount of four hundred
thousand (400,000) Saudi Riyals and a maximum of five hundred thousand (500,000) Saudi Riyals, in exchange for their
membership and participation, including additional remuneration if the member participates in any of the Committees
emanating from the BOD. In the event that the Company realizes profits, it may distribute 10% of net profits after deducting
the reserves determined by the General Assembly in implementation of the Cooperative Insurance Companies Control Law
and after distributing at least 5% of the Company’s paid-up capital as dividends to shareholders. The entitlement of such
remunerations has to be proportional to the number of sessions attended by the member; and any estimate to the contrary is
deemed void. In all cases, the total remuneration of the Board member, including bonuses and monetary or in-kind benefits,
does not exceed (500,000) Saudi Riyals annually. The maximum allowance for attending the Board and Committees sessions
shall be five thousand (5,000) Saudi Riyals for each session, not including travel and accommodation expenses.
- Each Board member, including the Chairman, is reimbursed for the actual expenses they bear in order to attend Board and
Committees meetings, including travel, accommodation and subsistence expenses.
- The remunerations’ policy for members of the Executive Management includes disclosure of remuneration for Executive
Management employees in an appropriate manner and in accordance with any instructions and regulations issued by the
regulatory and supervisory authorities in force in the KSA, as this report determines the remunerations and benefits for five
senior executives who received the highest remuneration from the Company.
- The following table outlines the total remuneration of the Board and Senior Executives for the past three years:

Table No. (78): Remuneration of the Board and Senior Executives

Distributions* 2020G 2021G 2022G

Board of Directors 3,816,667 3,931,111 3,323,889

Committee Members 95,000 120,000 10,000

Senior Executives 5,321,428 4,919,434 4,331,133

Total 9,233,095 8,970,545 7,665,022

Source: The Company
*On 07/11/1442H (corresponding to 17/06/2021G), The OGA approved the remuneration distributed to the Board and Committees members for the fiscal year 2020G which amounted to
(3,846,667) Saudi Riyals. On 03/03/1444H. (corresponding to 29/09/2022G), the OGA approved the remuneration distributed to the Board and Committees members for the fiscal year 2021G
which amounted to (3,931,111) Saudi Riyals. On 13/01/1445H (corresponding to 31/07/2023G), the OGA approved the remuneration distributed to the Board and Committees members for
the fiscal year 2022G which amounted to (3,323,889) Saudi Riyals.

9.2.1.4 Board Meetings

- Pursuant to article (21) of the Company’s Bylaws that the Board shall meet at the Company’s head office upon the invitation
of the Chairman who is required to convene the Board whenever two of its members at least requested and such invitation
shall be recorded as per the requirements of the Board, either by attendance or by proxy on behalf of another member. The
Board may convene its meeting outside the Company’s head office of the Company provided that it meets at least 4 times
during one fiscal year, so that there is at least one meeting every three months.
- The following table outlines the Company’s compliance with the Bylaws in terms of the number of meetings for the past three
years up to the date of this Prospectus:

Table No. (79): Board Meetings

2020G 2021G 2022G 2023G*

Number of Board Meetings
8 8 8 21
Source: The Company
*Until the date of this Prospectus

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9.2.2 Board Committees
The Board has formed six committees to assist it in carrying out its responsibilities:

(1) the Audit Committee, (2) the Nominations and Remuneration Committee, (3) the Executive Committee, (4) the Investment Committee and
(5) the Risk Committee.

9.2.2.1 Audit Committee

9.2.2.1.1 Formation of the Audit Committee

The Board of Directors, held on 05/06/1445H (corresponding to 18/12/2023G), appointed the Chairman and members of the Audit Committee,
which consists of three (3) members for a period of three (3) years starting from 09/05/1445H (corresponding to 23/11 /2023G) and ending on
the end date of the current session of the Board on 12/06/1448H (corresponding to 22/11/2026G), after obtaining the approval of the Insurance
Authority on 05/05/1445H (corresponding to 17/12/2023G).

Table No. (80): Audit Committee Members

Name Position Membership Status

Sami Ahmed Al-Babtain Committee Chairman Independent Board Member

Moaz Suleiman Al-Zaid Committee Member Independent Non-Board Member

Muhammad Ahmed Al Khamis Committee Member Independent Non-Board Member

Source: The Company

The Company has an Audit Committee Work Regulations that was approved by the OGA in its meeting held on 10/03/1442H (corresponding
to 27/10/2020G). The modified version of the regulations was subsequently approved by the BOD in its meeting held on 17/07/1444H
(corresponding to 08/02/2023G), which is set to be officially approved at the nearest OGA.

9.2.2.1.2 Functions, Powers and Competencies of the Audit Committee

According to the Company’s Audit Committee work regulations, the duties and powers of the Audit Committee are as follows:

- Develop a work plan approved by a decision of the Board of Directors, including the rules, responsibilities and obligations
of the Audit Committee.
- Supervise the Company’s internal audit department to ensure the effectiveness of its tasks.
- Oversee the Company’s compliance department to ensure of the effectiveness duties of its tasks.
- Appoint or dismiss the Director of the Compliance Department after obtaining a written non-objection from the Central Bank.
- Appoint or dismiss the Director of the Internal Audit Department after obtaining a written non-objection from the Central
Bank.
- Determine the monthly salary and incentive bonuses for the Director of the Internal Audit Department and the Director of the
Compliance Department in accordance with the Company’s internal regulations approved by the Board.
- Ensure the independence of the Internal Audit Department and the Compliance Department in performing their task duties
and ensuring that there is no negative impact on their work.
- Ensure the independence of the Company’s Board members, Senior Management, and external auditors.
- Study and review the annual financial statements and submit recommendations to the Board of Directors in this regard.
- Discuss proposals regarding the Company’s annual regulatory control work plan and approve it.
- Study the plan of the internal audit department and the external auditors, in addition to the compliance plans, approve them
and follow up on their implementation.
- Study the important accounting strategies, their procedures, and the changes that occur and submit recommendations to the
Board of Directors in this regard.
- Study internal audit reports and follow up on the mechanism for implementing corrective actions.
- Study audit reports on compliance management and submit recommendations thereon to the Board of Directors.
- Monitoring on reports issued by the institution and the relevant supervisory and regulatory bodies and submit recommendations
thereon to the Board of Directors.
- Make recommendations to the Board of Directors regarding approval of the appointment or reappointment of internal or
external auditors.
- Approve contracts with the Company’s internal and/or external auditors, and obtain written approval from the Central Bank.

133
 - Study the reports of internal or external auditors and submit recommendations thereon to the Board of Directors.
- Evaluate the efficiency and effectiveness of the work of internal or external auditors.
- Study the observations of the Central Bank and the supervisory and regulatory authorities related to any regulatory violations,
request corrective measures, direct the Company’s internal departments to implement them, and submit recommendations to
the Board of Directors in this concern.
- Ensure the Company’s commitment to implementing the actuarial expert suggestions and recommendations, and submit
recommendations thereon to the Board of Directors.
- Ensure the optimal use of information technology and provide the necessary controls to obtain accurate and reliable
information and data.
- Review the surplus distribution processes on a semi-annual basis and submit reports to the Company’s Board of Directors in
the event of any observations.
- Discuss the initial quarterly financial statements with the external auditors and the Company’s Senior Management before
issuance.
- Study and oversee the initial quarterly financial statements and recommend them to the Board of Directors.
- Study the internal and external auditors’ evaluation of internal control procedures.
- Study operations among group entities and operations with related parties.
- Study the actuary’s reports and submit recommendations thereon to the Board of Directors.
- Ensure the Company’s commitment to implementing the actuary’s suggestions and recommendations.
- Ensure the availability of a written regulation of the rules of professional conduct after approval by the Company’s Board of
Directors to guarantee that the Company’s activities are carried out in a fair and ethical manner.
- Follow up on important lawsuits filed by or against the Company and submit periodic reports to the Board of Directors in
this regard.
- Periodically review the financial dues for insurance premiums related to the insurance policies of related parties and potential
default cases and submit a report to the Company’s Board of Directors if the need arises.

9.2.2.1.3 Audit Committee Meetings

Pursuant to Clause (53) of the Audit Committees Regulation in Insurance and/or Reinsurance Companies, the Audit Committee shall meet at
least six times a year. In accordance with the Committee Meetings Article of the Audit Committee’s Work Regulations, the Committee holds
six (6) meetings per year, including the annual meeting with the Board of Directors.

The Audit Committee held its meetings during the past years until the date of this Prospectus according to the following schedule:

Table No. (81): Audit Committee Meetings

Year 2020G 2021G 2022G 2023G*

Number of Meetings 6 7 1 6
Source: The Company
*As of the date of this Prospectus

It should be noted that the Company doesn’t comply with the minimum number of meetings as stated in Paragraph (53) of the Audit Committees
Regulation in Insurance and/or Reinsurance Companies and according to the Work Regulations of its Audit Committee for the year 2022G, as
(1) meeting was held in that year, noting that the minimum number of meetings is (6) meetings per year including the annual meeting with the
Board of Directors.

134
9.2.2.2 Nominations and Remuneration Committee

9.2.2.2.1 Members of the Nominations and Remuneration Committee

The Board of Directors, held on 11/06/1445H (corresponding to 24/12/2023G), appointed the Chairman and members of the Nominations and
Remuneration Committee, which consists of four (4) members for a period of three (3) years starting from 09/05/1445H (corresponding to
23/11/2023G) and ending on the end date of the current term of the Board on 12/06/1448H (corresponding to 22/11/2026G), after obtaining the
approval of the Insurance Authority on 11/06/1445H (corresponding to 24/12/2023G).

Table No. (82): Nominations and Remuneration Committee Members

Name Position Membership Status

Abdullah Suleiman Al Hindi Chairman of the Committee Independent Board Member

Ahmed Khader Al-Baqshi Committee Member Independent Board Member

Mohammad Abdulaziz Al-Naim Committee Member Independent Board Member

Naif Rashed Al-Arfaj Committee Member Independent Board Member

Source: The Company

The Company has a Work Regulation for the Nominations and Remuneration Committee (amended) that was approved by the Ordinary
General Assembly of Shareholders held on 10/03/1442H (corresponding to 27/10/2020G).

9.2.2.2.2 Duties, Powers and Competencies of the Nominations and Remuneration Committee
The Company’s Nominations and Remuneration Committee’s Work Regulations specify its duties and powers as follows:

- Develop clear policies for the remuneration of the Board of Directors, members of Senior Management, and committees,
taking into account the use of standards related to performance, and make them clear and available to all shareholders before
the General Assembly is held.
- Provide policies and procedures regarding job succession for the Company, the Board of Directors, and members of Senior
Management and monitoring their implementation.
- Establish clear procedures for the Board membership, that includes the approvals of the General Assembly and regulatory
authorities, provided that every shareholder has the right to be a candidate for the Board membership, as stated in the
regulations.
- Develop plans to fill vacant leadership positions in the Company, including members of Senior Management, and follow up
on the implementation of plans and procedures for filling vacant positions.
- Provide recommendations regarding the nomination of Board members and determine their financial compensation according
to the requirements and policies approved by the Company in compliance with the rules and regulations issued by the
regulatory authorities.
- Provide a training and induction program for Board members that includes the Company’s functions and achievements
enabling them to perform their work with the required efficiency and supervise it periodically.
- Ensure the independence of independent Board members.
- The Nomination and Remuneration Committee has to submit its plans regarding the shares of remuneration and compensation
for the Senior Executive Management and employees to the Audit Committee to be reviewed according to the Key Performance
Indicators (KPIs) and then approved by the Board of Directors and the Shareholders’ Assembly.
- Verify annually that there are no cases of conflict of interest among Board members if one of them is a member of the Board
of Directors of another Company.
- Identify weaknesses and strengths in the Board of Directors and provide suggestions on addressing them win a way that is
consistent with the interest of the Company and in accordance with periodic and annual evaluation standards and procedures
of performance and suitability, fill out all forms of periodic and annual evaluation, as well as the annual suitability form for
the Board, Committees and Senior Management members.
- Review annually all necessary competencies and identify of qualifications and appropriate skills required for Board
membership.
- Oversee the needs required for membership in the Board of Directors and its Committees and prepare a description of the
capabilities and qualifications required for membership in the Board of Directors or Committees, and specify the time that a
member must devote to the work of the Board of Directors and/or Board Committees.
- Review plans to fill vacant positions for Board and Committees members.
- Review the compensation, financial rewards and benefits of Senior Management members and submit recommendations
thereon to the Board of Directors.
- Review and approve matters related to annual salaries, KPI-linked bonuses, sales commission and cash bonuses, and long-

135
 term incentive plans.
- Submit recommendations in the event of any change in the structure of the Board of Directors.
- Submit a recommendation to the Board of Directors regarding the selection and dismissal of Senior Management members.
- Submit performance reports of the Nominations and Remuneration Committee periodically to the Board of Directors.
- Establish job descriptions for Executive members, non-executive, independent, and Senior Executives.
- Verify annually the independence of members and the absence of conflicts of interest.

9.2.2.2.3 Nominations and Remuneration Committee Meetings

According to the Work Regulations of the Company’s Nominations and Remuneration Committee, meetings shall not be less than twice a year,
and additional meetings may be held when needed.

The Nominations and Remuneration Committee held its meetings during the past years as of the date of this Prospectus according to the
following timetable:

Table No. (83): Nominations and Remuneration Committee Meetings

Year 2020G 2021G 2022G 2023G*

Number of Meetings 5 3 3 3
Source: The Company
*As of the date of this Prospectus

9.2.2.3 Risk Committee

9.2.2.3.1 Members of the Risk Committee

The Board of Directors, held on 11/06/1445H (corresponding to 24/12/2023G), appointed the Chairman and members of the Risk Committee,
which consists of three (3) members for a period of three (3) years starting from 09/05/1445H (corresponding to 23/11 /2023G) and ending
on the end of the current term of the Board on 12/06/1448H (corresponding to 22/11/2026G), after obtaining the approval of the Insurance
Authority on 11/06/1445H (corresponding to 24/12/2023G).

Table No. (84): Members of the Risk Committee

Name Position Membership Status

Nayef Rashid Al-Arfaj Chairman of the Committee Independent Board Member

Sultan Abdulaziz Al Suwaidi Committee Member Non-executive Board Member

Saoud Saleh Al Arifi Committee Member Independent Board Member

Source: The Company

It should be noted that the Company has a special Work Regulations for the Risk Committee that has been approved by the Board on
17/07/1444H (corresponding to 08/02/2023G).

9.2.2.3.2 Functions, Powers and Competencies of the Risk Committee

According to Paragraphs (4.5) and (4.6) of the Company’s Risk Committee Work Regulations, the Committee’s main functions are to assist the
Board of Directors in its supervisory responsibilities for risk management, including the following:

- Establish a risk management framework.

- Determine the Company’s risk tolerance.
- Ensure implementation of action plans and restrictions to reduce and manage risks.
- Ensure strict Board oversight of critical risk issues.
The main functions of the Risk Committee include:

- Monitor the performance and implementation of the Company’s internal control systems, ensure the effectiveness and
efficiency of those systems, and ensure the implementation of internal control decisions and procedures.
- Identify risks that may expose the Company to danger and maintain an acceptable risk profile.
- Supervise the risk management system and evaluate its effectiveness.
- Define a comprehensive risk management strategy, supervise its implementation, review and update it periodically, taking

136
 into account the Company’s internal and external developments.
- Oversee risk management policies.
- Reassess the Company’s risk tolerance and exposure on a regular basis (for example, through stress testing exercises).
- Submit reports to the Board of Directors detailing risk exposure and recommending the necessary actions to manage them.
- Ensure the availability of adequate resources and systems to manage risks.
- Verify the independence of the risk management employees from activities that may expose the Company to risks.
- Evaluate the performance of the Head of Risk Management and the activities of the Risk Management Department.
- Review and approve requests of information from management, employees, or any other party regarding the activities and
decisions of the Committee.
The Committee evaluates matters that fall within its jurisdiction or that are referred to it by the Board and submits its recommendations to the
BOD which issues decisions in this regard. The Committee shall take decisions in this regard if authorized by the Board. The Committee may
seek the assistance of any experts or specialists, whether internally or externally, within the scope of its powers. This must be included in the
minutes of the Committee’s meeting.

9.2.2.3.3 Risk Committee Meetings

According to the Work Regulations of the Risk Committee, meetings shall not be less than four (4) times a year, and additional meetings may
be held when needed.

The Risk Committee held its meetings over the past years until the date of this Prospectus according to the following schedule:

Table No. (85): Risk Committee Meetings

Year 2020G 2021G 2022G 2023G*

Number of Meetings 3 3 4 3
Source: The Company
*As of the date of this Prospectus

According to the abovementioned, the Company doesn’t comply with the minimum number of meetings as stated in Article (7) of the
Company’s Risk Committee Work Regulations for the years 2020G and 2021G, as it held (3) meetings in both years, noting that the minimum
number of meetings is (6) meetings per year.

9.2.2.4 Executive Committee

9.2.2.4.1 Executive Committee Members

The Board of Directors, held on 11/06/1445H (corresponding to 24/12/2023G), appointed the Chairman and members of the Executive
Committee, which consists of five (5) members for a period of three (3) years starting from 09/05/1445H (corresponding to 23/11 /2023G)
and ending on the end date of the current Board session on 12/06/1448H (corresponding to 22/11/2026G), after obtaining the approval of the
Insurance Authority on 11/06/1445H (corresponding to 24/12/2023G).

Table No. (86): Members of the Executive Committee

Name Position Membership Status

Saud Saleh Al-Arifi Chairman of the Committee Independent Board Member

Abdul Mohsen Nafez Jaber Committee Member Non-executive Board Member

Sultan Abdulaziz Al Suwaidi Committee Member Non-executive Board Member

Yasser Mohammed Al-Harbi Committee Member Executive Board Member

Abdullah Suleiman Al Hindi Committee Member Independent Board Member

Source: The Company

It should be noted that the Company has a Work Regulations for the Risk Committee that has been approved by the Board on 17/07/1444H
(corresponding to 08/02/2023G).

137
9.2.2.4.2 Functions, Powers and Competencies of the Executive Committee
In accordance with Article (11) of the Company’s Executive Committee Work Regulations, members have to perform their functions and
responsibilities, exercise the necessary diligence to do so, and work in good faith for the success of the Company. The Committee has also to
assume the following functions:

- Provide recommendations to the Board of Directors regarding the strategic and operational plans, budgets and business plans
developed by management.
- Make decisions on matters authorized by the Board that are outside the scope of the CEO’s powers, including matters related
to capital expenditures and purchases within the limits authorized to the Committee by the Board.
- Review the Company’s mechanisms, procedures and strategy in cooperation with Executive Management.
- Supervise the Executive Management’s performance and verify its work in accordance with the Company’s strategy, policies
and approved regulations.
- Oversee and evaluate the Executive Management’s performance and its effectiveness and submit the necessary
recommendations to the Board.
- Continuously analyze operational risks and work to reduce them.
- Ensure the implementation of the Company’s internal control systems.
- Arrange priorities in allocating capital, human and technical resources.
- Monitor market shares, growth rates and penetration.
- Monitor the implementation of the expansion of points of sale and branches.

9.2.2.4.3 Executive Committee Meetings

In accordance with Article (98) of the Insurance Companies Governance Regulations and Article (5) of the Company’s Executive Committee
Work Regulations, the Committee shall convene periodically whenever the need arises and not less than six (6) meetings per year.

The Executive Committee held its meetings over the past years until the date of this Prospectus according to the following schedule:

Table No. (87): Executive Committee Meetings

Year 2020G 2021G 2022G 2023G*

Number of Meetings 5 1 6 5
Source: The Company
*As of the date of this Prospectus

According to the abovementioned, the Company doesn’t comply with the minimum number of meetings as stated in Article (98) of the
Insurance Companies Governance Regulations and Article (5) of the Company’s Executive Committee Work Regulations for the years 2020G
and 2021G, as it held (5) meetings in 2020G and only (1) meeting in 2021G, noting that the minimum number of meetings is (6) meetings per
year.

9.2.2.5 Investment Committee

9.2.2.5.1 Investment Committee Members

The Board of Directors, held on 11/06/1445H (corresponding to 24/12/2023G), appointed the Chairman and members of the Investment
Committee, which consists of four (4) members for a period of three (3) years starting from 09/05/1445H (corresponding to 23/11/2023G)
and ending on the end of the current session of the Board on 12/06/1448H (corresponding to 22/11/2026G), after obtaining the approval of the
Insurance Authority on 11/06/1445H (corresponding to 24/12/2023G).

Table No. (88): Members of the Investment Committee

Name Position Membership Status

Yasser Mohammed Al-Harbi Chairman of the Committee Executive Board Member

Abdul Mohsen Nafez Jaber Committee Member Non-executive Board Member

Muhammad Abdulaziz Al-Naeem Committee Member Independent Board Member

Ahmed Khader Al-Baqshi Committee Member Independent Board Member

Source: The Company

It should be noted that the Company has a special Work Regulations for the Risk Committee that has been approved by the Board on
17/07/1444H (corresponding to 08/02/2023G).

138
9.2.2.5.2 Functions, Powers and Competencies of the Investment Committee
According to Article (11) of the Company’s Investment Committee Work Regulations, members of the Committee have to perform their
functions and responsibilities, exercise the necessary diligence to do so, and work in good faith for the success of the Company. The Committee
has also to undertake the following functions:

- Formulate and prepare the investment policy and review its performance and implementation on an annual basis.
- Review the performance of each asset class.
- Follow up on the general risks of investment policy.
- Submit the investment portfolio performance report to the Board of Directors.
- Ensure that all investment-related activities comply with the requirements of the investment regulations issued by the Saudi
Central Bank and the requirements of other relevant laws and regulations.

9.2.2.5.3 Investment Committee Meetings

According to Article (5) of the Work Regulations of the Company’s Investment Committee, meetings shall not be less than twice a year, and
additional meetings may be held when needed.

The Investment Committee held its meetings during the past years as of the date of this Prospectus according to the following schedule:

Table No. (89): Investment Committee Meetings

Year 2020G 2021G 2022G 2023G*

Number of Meetings 3 3 3 1
Source: The Company
*As of the date of this Prospectus

9.2.3 Executive Management

According to the Company’s Bylaws, policies and relevant Board of Directors Resolutions, the Executive Management is entrusted with the
Managing Director (MD). As of the date of this Prospectus, the position of MD is held by Mr. Yasser Mohammed Al-Harbi, and the position of
CEO is held by MrMasood Ahmed Bhatti. The table below outlines the names and details of Senior Management:

Table No. (90): Executive Management

Date of the Central Bank

Name Position Nationality Age Date of Appointment
No-Objection Letter

Yasser Mohammed 12/07/1445H (corresponding 04/06/1445H (corresponding to

Managing Director Saudi 53
Alharbi to 25/01/2024G) 17/12/2023G)
29/05/1434H (corresponding 28/01/1445H (corresponding to
Masood Ahmed Bhatti Finance Director (Assignment) Pakistani 42
to 10/04/2013G) 15/08/2023G)
Dalal Abdullah Al- Head of Technical 22/10/1440H (corresponding 02/07/1444H (corresponding to
Saudi 39
Burhan Administration to 25/06/2019G) 24/01/2023G)
14/05/1445H (corresponding 21/06/1445H (corresponding to
Terky Nasser Al Maouh Head of compliance Saudi 49
to 28/11/2023G) 03/01/2024G)
Head of the Internal Audit 17/03/1440H (corresponding 24/01/1440H (corresponding to
Imad Mahdi Awani Saudi 39
Department to 25/11/2018G) 04/10/2018G)
Kazem Ahmed Al Director of Medical 01/03/1442H (corresponding 14/01/1442H (corresponding to
Saudi 48
Kazem Administration to 18/10/2020G) 02/09/2020G)
Ahmed Abdul Rahman 08/03/1442H (corresponding 08/05/1445H (corresponding to
Head of commercial activity Saudi 42
Al-Mutaliq to 25/10/2020G) 22/11/2023G)
14/02/1442H (corresponding 21/04/1445H (corresponding to
Noura Al-Assoum Risk Manager (Assigned) Saudi 34
to 01/10/2020G) 05/11/2023G)
17/07/1442H (corresponding 21/05/1445H (corresponding to
Ahmed Al-Ghanim Reinsurance Manager Saudi 37
to 01/03/2021G) 05/12/2023G)
Senior Underwriting Manager, 25/06/1442H (corresponding 01/12/1444H (corresponding to
Ahmed Al-Mousa Saudi 38
General Insurance to 07/02/2021G) 19/06/2023G)
Tariq Abdulaziz Al- 19/06/1442H (corresponding 04/09/1444H (corresponding to
Director of Legal Department Saudi 43
Mashouq to 01/02/2021G) 26/03/2023G)
Director of Information 09/05/1442H (corresponding 26/11/1444H (corresponding to
Ali Abbas Ramadan Saudi 46
Technology Department to 24/12/2020G) 15/06/2023G)

139
 Date of the Central Bank
Name Position Nationality Age Date of Appointment
No-Objection Letter

Yasmine Muhammad 01/11/1436H (corresponding 13/04/1441H (corresponding to

Customer Care Manager Saudi 28
Al-Zahrani to 03/03/2022G) 10/12/2019G)
30/07/1443H (corresponding 28/11/1443H (corresponding to
Firas Ali Al Daoud Vehicle Claims Manager Saudi 51
to 03/03/2022G) 27/06/2022G)
Director of Actuarial 16/04/1445H (corresponding 29/04/1445H (corresponding to
Ritika Jain Indian 44
Department to 31/10/2023G) 13//2023G)
Source: The Company

9.3 Corporate Governance

- According to the Laws, Regulations and Instructions issued by the CMA, and in particular the Corporate Governance
Regulations, in addition to the Insurance Companies Governance Regulations issued by the Saudi Central Bank, a Corporate
Governance manual was developed for the Company and approved, along with its amendments, during the Board of Directors
meeting held on 17/07/ 1444H (corresponding to 08/02/2023G) and the (Ordinary) General Assembly held on 13/01/1445H
(corresponding to 31/07/2023G.

9.4 Subsidiaries and Associate Companies

- According to Article (4) of the Bylaws, the Company may create limited liability Companies or closed joint stock Companies
(provided that the capital is not less than SAR (5.000.000) or a contribution from one person. The Company may also own
shares and stakes in other existing Companies or merge with them, participate with third parties in establishing joint stock or
limited liability companies, provided these companies carry out businesses similar to its business, financial business or help
the Company achieve its objectives, after fulfilling the requirements of the implemented regulations and instructions in this
regard and obtaining the Saudi Central Bank’s approval.
- As of the date of this Prospectus, the Company does not have any subsidiaries Companies inside or outside the Kingdom of
Saudi Arabia.
- It should be noted that the Company has an investment in Najm Insurance Services Company with (192,308) shares,
representing (3.45%) of the capital.

140
9.5 Government Approvals, Licenses and Certificates

9.5.1 Licenses, Certificates and Approvals Related to the Head Office

- The Company obtained the required licenses, certificates and permits from the competent authorities that are necessary to
carry out its activities, in accordance with the applicable laws and regulations in the Kingdom of Saudi Arabia.
- The following tables outlines the current licenses and approvals obtained by the Company related to its head office.

Table No. (91): Licenses, Certificates and Approvals Related to the Head Office

Date of Issuance/
Certificate Type Purpose Certificate Number Date of Expiry Issuing Entity
Renewal

Registration of the
22/03/1429H
Commercial Company in the 26/01/1446H (corresponding to Ministry of Commerce /
2051036871 (corresponding to
Registration commercial registry (joint 01/08/2024G) Al-Khobar Office
30/03/2008G)
stock companies)
Chamber of In accordance with
Commerce the provisions of the 01/05/1445H
26/01/1446H (corresponding to
and Industry Commercial Register Law, 93322 (corresponding to Al-Sharqiyyah Chamber
01/08/2024G)
Membership the Company is classified 15/11/2023G)
Certificate as first class
To indicate that the 18/03/1445H 21/10/1445H
Company has filled its tax Zakat, Tax and Customs
Zakat Certificate 1110232995 (corresponding to (corresponding to
returns and has committed Authority
to paying Zakat 10/03/2023G) 30/04/2024G)

02/12/1438H
Certificate of fulfilment of Zakat, Tax and Customs
VAT Certificate 300010874200003 (corresponding to --
VAT registration Authority
24/08/2017G)
12/06/1445H 11/07/1445H
GOSI Contribution In accordance with the
59734811 (corresponding to (Corresponding to GOSI
Certificate Social Insurance Law
25/12/2023G) 23/01/2024G)

Wage Protection 30/04/1445H Ministry of Human

In accordance with the 02/07/1445H (corresponding to
Commitment 20012311026480 (corresponding to Resources and Social
Wage Protection Law 14/01/2024G)
Certificate 14/11/2023G) Development

To indicate that the

Company is compliant 12/06/1445H 14/09/1445H Ministry of Human
Saudization with the required
94822185-241457 (Corresponding to (Corresponding to Resources and Social
Certificate Saudization percentage
25/12/2023G 24/03/2024G) Development
according to Nitaqat
program
In accordance with
the Cooperative
Insurance Companies
Control Law that 20/03/1444H 19/03/1447H
Authorization
authorizes the Company
to undertake TMN/13/20083 (Corresponding to (Corresponding to Saudi Central Bank
to carry out insurance
insurance business 16/10/2022G) 11/09/2025G)
activity in the two
following branches
(general insurance and
health insurance)
Licensing the Company
according to its
Council of Health 05/08/1445H (corresponding to Council of Health
qualifications to practice -- --
Insurance license 15/02/2024G) Insurance
cooperative health
insurance business
Al-Sharqiyyah or Eastern
21/01/1446H Province Municipality
Licensing the Company
-West Dammam
Municipal License to practice commercial 440811699316 (Corresponding to Municipality of Al
activity 27/07/2024G) Faisaliah - Omar bin Al-
Khattab Street
Source: The Company

141
9.5.2 Licenses, Certificates and Approvals Related to the Company’s Branches
- The Company has branches in several Saudi cities: Jeddah - Najran - Hail - Tabuk - Al-Bahah - Riyadh - Jizan - Buraidah -
Madinah. The Company has to obtain licenses, certificates and approvals and maintain them to carry out its health insurance
and general insurance activities.
- Below are details of the licenses, approvals and certificates obtained by the Company’s branches:

Table No. (92): Licenses, Certificates and Approvals Related to the Company’s Branches

Date of Issuance/
Certificate Type Purpose Certificate Number Date of Expiry Issuing Entity
Renewal

“Al Sagr Cooperative Insurance Company” Branch in Jeddah

07/09/1429H 07/09/1445H Ministry of

Commercial Register the branch in the
4030182618 (corresponding to (corresponding to Commerce / Jeddah
Registration Commercial Registry
07/09/2008G) 17/03/2024G) Office
12/06/1445H 11/07/1445H
GOSI Contribution In accordance with the Social
59734904 (Corresponding to (Corresponding to GOSI
Certificate Insurance Law
25/12/2023G) 23/01/2024G)

Wage Protection 17/08/1445H 17/09/1445H Ministry of Human

In compliance with the Wage
Commitment 413013-73292875 (corresponding to (Corresponding to Resources and Social
Protection Commitment
Certificate 27/02/2024G) 27/03/2024G) Development
To indicate that the Company 12/06/1445H 14/09/1445H Ministry of Human
Saudization is compliant with the required
10402773-190404 (Corresponding to (Corresponding to Resources and Social
Certificate Saudization percentage according
25/12/2023G 24/03/2024G) Development
to Nitaqat program

“Al Sagr Cooperative Insurance Company” Branch in Riyadh

26/01/1429H 21/03/1446H Ministry of

Commercial Register the branch in the
1010243765 (corresponding to (corresponding to Commerce / Riyadh
Registration Commercial Registry
04/02/2008G) 24/09/2024G) Office
12/06/1445H 11/07/1445H
GOSI Contribution In accordance with the Social
59735534 (Corresponding to (Corresponding to GOSI
Certificate Insurance Law
25/12/2023G) 23/01/2024G)
To indicate that the Company
27/05/1445H 14/09/1445H Ministry of Human
Saudization is compliant with the required
20803180-199111 (corresponding to (corresponding to Resources and Social
Certificate Saudization percentage according
11/12/2023G) 24/03/2024G) Development
to Nitaqat program
Riyadh Municipality
09/09/1445H – Ulaya Sub-
Licensing the Company’s branch
Municipal License 43047978494 (corresponding to -- Municipality – Al
to practice commercial activity
03/19/2024G) Nuzha Quarter – Abu
Bakr Al-Siddiq
In compliance with the Civil 25/08/1444H 25/08/1445H
General Directorate
Salamah Certificate Defense Safety and Security 44-000884986-2 (corresponding to (corresponding to
of Civil Defense
Standards and Conditions 17/03/2023G) 06/04/2024G)

“Al Sagr Cooperative Insurance Company” Branch in Tabuk

29/01/1433H 29/01/1446H Ministry of

Commercial Register the branch in the
3550027342 (corresponding to (corresponding to Commerce / Tabuk
Registration Commercial Registry
24/12/2011G) 04/08/2024G) Office
Tabuk Municipality
13/06/1446H – Al Janoub Sub-
Licensing the Company’s branch
Municipal License 39066620 -- (corresponding to Municipality – Al
to practice commercial activity
24/12/2024G) Saadah Quarter – Ali
bin Abi Taleb
In compliance with the Civil 09/08/1444H 09/08/1445
General Directorate
Salamah Certificate Defense Safety and Security 44-000697881-3 (Corresponding to (Corresponding to
of Civil Defense
Standards and Conditions 03/01/2023G) 19/02/2024G)

“Al Sagr Cooperative Insurance Company” Branch in Buraydah

02/03/1434H 02/03/1446H
Commercial Register the branch in the Commercial Register
1131046600 (corresponding to (corresponding to
Registration Commercial Registry - Buraydah Office
14/01/2013G) 05/09/2024G)
Qassim Municipality-
28/03/1446H
Licensing the Company’s branch Deira Sub-
Municipal License 3909362370 -- (corresponding to
to practice commercial activity Municipality-Al-
01/10/2024G)
Marqab Quarter

142
 Date of Issuance/
Certificate Type Purpose Certificate Number Date of Expiry Issuing Entity
Renewal

In compliance with the Civil 08/09/1444H 08/09/1445H

General Directorate
Salamah Certificate Defense Safety and Security 44-00384067-3 (corresponding to (corresponding to
of Civil Defense
Standards and Conditions 30/03/2023G) 18/03/2024G)

“Al Sagr Cooperative Insurance Company” Branch in Hail

12/22/1438H 12/22/1445H Ministry of

Commercial Register the branch in the
3350044740 (corresponding to (corresponding to Commerce - Hail
Registration Commercial Registry
09/13/2017G) 06/28/2024G) Office
Hail Municipality
- Al-Wasat
16/01/1446H
Licensing the Company’s branch Sub-Municipality
Municipal License 43099747396 -- (corresponding to
to practice commercial activity -Alaaziziyah Quarter
22/07/2024G)
-Waraqa Bint Nofal
Street
In compliance with the Civil 14/01/1445H 14/01/1446H
General Directorate
Salamah Certificate Defense Safety and Security 44-000959852-2 (corresponding to (corresponding to
of Civil Defense
Standards and Conditions 01/08/2023G) 20/07/2024G)

“Al Sagr Cooperative Insurance Company” Branch in Najran

11/11/1433H 11/06/1446H Ministry of

Commercial Register the branch in the
5950022375 (corresponding to (corresponding to Commerce - Najran
Registration Commercial Registry
02/05/2012G) 12/12/2024G) Office
Najran Municipality
07/07/1445H
Licensing the Company’s branch - Najran Sub-
Municipal License 3909105351 -- (corresponding to
to practice commercial activity Municipality -Al-
19/01/2024G)
Fahd Quarter

“Al Sagr Cooperative Insurance Company” Branch in Jazan

04/05/1435H 04/05/1446H Ministry of

Commercial Register the branch in the
5900027845 (corresponding to (corresponding to Commerce - Jazan
Registration Commercial Registry
05/03/2014G) 11/06/2024G) Office
To indicate that the Company
12/04/1445H 14/09/1445H Ministry of Human
Saudization is compliant with the required
16418441-201078 (corresponding to (corresponding to Resources and Social
Certificate Saudization percentage according
25/12/2023G) 24/03/2024G) Development
to Nitaqat program
Jazan Municipality
17/08/1445H
Licensing the Company’s branch - Jazan Sub-
Municipal License 40082143103 -- (corresponding to
to practice commercial activity Municipality - Al-
27/02/2024G)
Safa Quarter

“Al Sagr Cooperative Insurance Company” Branch in Madinah

02/03/1434H 03/02/1446H
Commercial Register the branch in the
4650060439 (corresponding to (corresponding to commercial register
Registration Commercial Registry
14/01/2013G) 09/05/2024G)
12/06/1445H 11/07/1445H
GOSI Contribution In accordance with the Social
59734959 (corresponding to (corresponding to GOSI
Certificate Insurance Law
25/12/2023G) 23/01/2024G)
Wage Protection 17/08/1445H 17/09/1445H Ministry of Human
In compliance with the Wage
Commitment 189667-53422091 (corresponding to (corresponding to Resources and Social
Protection Commitment
Certificate 27/02/2024G) 27/03/2024G) Development
To indicate that the Company
17/08/1445H 19/11/1445H Ministry of Human
Saudization is compliant with the required
110061-21382282 (corresponding to (corresponding to Resources and Social
Certificate Saudization percentage according
27/02/2024G) 27/05/2024G) Development
to Nitaqat program

“Al Sagr Cooperative Insurance Company” Branch in Al-Bahah

02/03/1434H 02/03/1446H Ministry of

Commercial Register the branch in the
5800014660 (corresponding to (corresponding to Commerce – Al-
Registration Commercial Registry
14/01/2013G) 04/09/2024G) Bahah Office
Al Baha Municipality
22/07/1445H
Licensing the Company’s branch -Al-Bahah Sub-
Municipal License 42095518726 -- (corresponding to
to practice commercial activity Municipality -Al
03/02/2024G)
Souk Quarter
Source: The Company

143
9.5.3 Central Bank Approvals Related to Opening and Closing Points of Sale and Branches
The Company obtained approvals from the Central Bank to open, close and change the location of branches and points of sale as follows:

Table No. (93): Central Bank Approvals to Open and Close Points of Sale and Branches

The date of the Central Bank’s The date of the Central Bank’s
No. City Address
approval to open the point of sale approval to close the point of sale

05/05/1432H 14/11/1443H
1 Jeddah Matar Bin Shuba Street
(corresponding to 09/04/2011G) (corresponding to 13/06/2022G)
05/05/1432H 22/05/1444H
2 Abha Wadi Bin Hashbal Road - Scheme Number 1
(corresponding to 09/04/2011G) (corresponding to 15/12/2022G)
05/05/1432H
3 Khamis Mushait King Fahd Road Closed
(corresponding to 09/04/2011G)
05/05/1432H 27/05/1441H
4 Al Khobar Majid Bin Abdul Aziz Street
(corresponding to 09/04/2011G) (corresponding to 22/01/2020G)
05/05/1432H
5 Qatif Al Quds Street NA
(corresponding to 09/04/2011G)
Madinah Street - Opposite King Abdul Aziz 05/05/1432H
6 Tabuk NA
Charitable Society (corresponding to 09/04/2011G)
Najran (Company’s Salman Al Farsi Street – Opposite Jawazat 05/05/1432H
7 NA
Branch) Building (corresponding to 09/04/2011G)
02/07/1435H 27/05/1441H
8 Riyadh King Fahd Road, Opposite Jawazat
(corresponding to 01/05/2014G) (corresponding to 22/01/2020G)
Riyadh District – Hafsa Bint Omar Street, 02/07/1435H
9 Riyadh NA
Opposite Al -Rawda Al Jadida (corresponding to 01/05/2014G)
02/07/1435H 27/05/1441H
10 Al Khobar Al-Thuqbah District - Street N. (10)
(corresponding to 01/05/2014G) (corresponding to 22/01/2020G)
Qamriya District – Hind Bint Al Hassan Street 02/07/1435H
11 Taif NA
(Near Jawazat) (corresponding to 01/05/2014G)
Sakaka - Al-Rahmaniyah District - King Fahed 02/07/1435H
12 Al Jawf NA
Street (corresponding to 01/05/2014G)
Al-Safa District/King Fahd Street, Opposite 26/11/1436H
13 Hafr al-Batin Closed
Labor Office (corresponding to 10/09/2015G)
Al Rabwah District – Al Makrounah Street (Al 26/11/1436H
14 Jeddah Closed
Thamaneen) (corresponding to 10/09/2015G)
Al-Balad District - King Abdul Aziz Street -
The address was moved to Al-Jawhara District
on Al-Ma’arada Street in Jeddah, and was 26/11/1436H
15 Jeddah Closed
approved by the Central Bank on 29/04/1437H (corresponding to 10/09/2015G)
(corresponding to 08/02/2016G) pursuant to
Resolution No. (371000049374).
Jubail District – Al Balad – Al Jubail Street, 26/11/1436H
16 Al Jubail NA
Intersection with Jeddah Street (corresponding to 10/09/2015G)
Makkah al- 26/11/1436H 14/11/1443H
17 Al-Zahir District - Al Ain Al Moajer Street
Mukarramah (corresponding to 10/09/2015G) (corresponding to 13/06/2022G)
26/11/1436H
18 Riyadh Al-Naseem District - Al-Arbaeen Street Closed
(corresponding to 10/09/2015G)
Al Qassim Al Jamiyin District - Al-Wazir Bin Sulaiman 26/11/1436H 23/04/1445H
19
(Unaizah) Street (corresponding to 10/09/2015G) (corresponding to 08/11/2023G)
Hail Region - Omar bin al-Khattab Street – Al
Azizia District - The address was transferred to
Al-Aziza - Hail, Uqda Road - opposite the Hail
Hail (Company’s 26/11/1436H
20 Traffic Department - Office No. 10 (formerly NA
Branch) (corresponding to 10/09/2015G)
Omar bin Al-Khattab Street) pursuant to the
approval of the Central Bank on 08/09/1442H
(corresponding to 20/04/2021G).
Al Qatif (Al- 26/11/1436H
21 Al-Rif District - Al-Awamiyah Main Street Closed
Awamiyah) (corresponding to 10/09/2015G)

144
 The date of the Central Bank’s The date of the Central Bank’s
No. City Address
approval to open the point of sale approval to close the point of sale

Al Khobar - King Faisal Street - Al-Rawaby

District - Pavilion Commercial Building 8422
- Ground Floor
Ash-Sharqiyah The address was transferred to the Eastern 05/05/1442H 22/05/1444H
22
(Eastern Province) Region – Al Khobar - King Faisal Road - (corresponding to 20/12/2020G) (corresponding to 15/12/2022G)
Al-Yarmouk District - Ground Floor pursuant
to the approval of the Central Bank on
26/11/1442H (corresponding to 07/07/2021G).
King Khaled Road - In front of Jawazat Gate - 12/01/1436H 22/05/1444H
23 Dammam
Ash-Sharqiyah (corresponding to 11/05/2014G) (corresponding to 15/12/2022G)
It was closed in accordance with
Al Shifaa District – Al-Marwa - Al-Khalil Bin 04/09/1433H the approval of the Central Bank on
24 Riyadh
Ahmed Street - Building No. 7525 (corresponding to 23/07/2012G) 27/05/1441H
(corresponding to 22/01/2020G).
27/05/1441H
25 Al-Ahsa Al Dahran Street - Mubarraz Roundabout --
(corresponding to 22/01/2020G)
Yanbu Al-Bahr - Al-Amoudi District - Jawazat 04/09/1433H 27/05/1441H
26 Yanbu
Roundabout (corresponding to 23/07/2012G) (corresponding to 22/01/2020G)
Al-Marqab neighbourhood - Al-Arbaeen 04/09/1433H
27 Al Qassim (Branch) NA
Street, next to Passports (corresponding to 23/07/2012G)
04/09/1433H
28 Jeddah Al-Kandara District – Al Matar Street NA
(corresponding to 23/07/2012G)
Government Departments Complex -Opposite 04/09/1433H
29 Al-Ahsa NA
Jawazat Al-Ahsa (corresponding to 23/07/2012G)
Al Bahah
04/09/1433H
30 (Company’s Abu Bakr Al-Siddiq Street, near Passports NA
(corresponding to 23/07/2012G)
Branch)
Jazan (Company’s Jawazat District - Port Road - Tawhid 04/09/1433H
31 NA
Branch) Roundabout (corresponding to 23/07/2012G)
AL Madinah AL Al Khaldiyeh District - Opposite Jawazat 04/09/1433H
32 NA
Munawwarah Office (corresponding to 23/07/2012G)
Makkah Al-Mukarramah Branch Road - King 26/10/1442H
33 Riyadh --
Abdul Aziz District - Building No. 3922 (corresponding to 07/07/2021G)
Siteen Street - Malaz District - Platinum Center

Riyadh (Company’s The address was moved to Abu Bakr Al-Siddiq 08/09/1442H
34 Road, Al-Nuzha District, Unit No. 37, pursuant NA
Branch) (corresponding to 20/04/2021G)
to the approval of the Central Bank dated
08/09/1442H (corresponding to 20/04/2021G)
Makkah Al-Mukarramah - Jeddah - Abdul
Rahman Al-Dakhil Street - Al Nahda District
Jeddah (Company’s The address was moved to Prince Sultan - 08/09/1442H
35 NA
Branch) Al-Rawda District, pursuant to the approval (corresponding to 20/04/2021G)
of the Central Bank dated 08/09/1442H
(corresponding to 20/04/2021G)
Source: The Company

145
9.6 Continuing Obligations Imposed by Government Entities on the Company as the
“Licensee”
The Company and its branches are required, as license issuer, to adhere to the essential requirements imposed by the competent authorities in
order to maintain licenses, certificates and approvals as follows:

9.6.1 Continuing Obligations According to the Requirements of the Ministry of Commerce

- The Company complies with the Law of Commercial Register in terms of registration with the CR Department in the city
of Al-Khobar, where it headquarters are located, under Certificate No. (2051036871) dated 22/03/1429H (corresponding to
30/03/2008G) which expires on 26/01/1446H (corresponding to 08/01/2024G). It also complies with the Law of Commercial
Register in terms of obtaining a membership certificate from the Chamber of Commerce and Industry under Certificate No.
(93322) dated 05/01/1445H (corresponding to 15/11/2023G) and expiring 26/01/1446H (corresponding to 08/01/2024G).
- As of the date of this Prospectus, the Company was not committed to amend its Bylaws in line with the new and recent
amendments that occurred based on the Companies Law issued by Royal Decree No. (M/132) dated 12/01/1443H
(corresponding to 30/06/2022G). The latest version of the Bylaws was issued based on the EGA held on 17/03/1444H
(corresponding to 13/10/2022G), and approved by the Ministry of Commerce (Operations Department) on 09/07/1444H
(corresponding to 31/01/2023G). The Company is in compliance with the requirements of the CMA and the Saudi Tadawul
Company (Saudi Tadawul) in terms of uploading a copy of the Bylaws on the Tadawul website on the Company’s page.
- Furthermore, the Company is in compliance with the Law of Commercial Register in terms of registration before the
Commercial Registry Department for all its branches in the cities of: Jeddah - Najran - Hail - Tabuk - Al-Bahah - Riyadh
- Jizan - Buraidah - Madina Al Munawarrah, but it did has not completed all procedures for establishing its branches.
Therefore, registration certificates were not issued in the Chambers of Commerce and Industry for each of these branches.
- The Company is in compliance with Article (88) of the Companies Law, which requires the GA of Shareholders to convene at
least once during the six months following the end of the fiscal year. The Company held its GA within the regulatory deadline
on 04/11/1444H (corresponding to 24/05/2023G).

9.6.2 Continuing Obligations According to the Requirements of the Zakat, Tax and Customs
Authority (ZATCA)
- The Company, like other registered establishments and Companies operating in the Kingdom, is required to submit its Zakat
and tax declarations within (120) days of the end of the fiscal year for the purpose of renewing the certificate issued by the
ZATCA. The Company was registered as a taxpayer under the distinctive tax number (3000108742). It submitted its Zakat
declarations for the fiscal year ending on December 31, 2022G, and obtained a Zakat certificate from the ZATCA under
number (1110232995) dated 18/03/1445H (corresponding to 10/03/2023G) and expiring on 21/10/1445H (corresponding
to 30/04/2024G). This certificate enables the Company to complete all its transactions, including paying its final dues for
contracts.
- It should be noted that Zakat due to be paid to the ZATCA for the fiscal year ending on December 31, 2022G amounted to
(4,598,601) Saudi Riyals, and the Zakat due to be paid for the nine-month period ended September 30, 2023G, amounted to
(6,955,053) Saudi Riyals.
- During the year ending on December 31, 2020G, the Company received final Zakat assessments for the years starting from
2012G to 2018G, and the total additional Zakat obligations according to the assessment amounted to (36,300,000) Saudi Riyals
for these years. The Company filed an appeal before the General Secretariat of Zakat Committees (Supreme Committees)
against the assessments, and submitted simultaneously a settlement request to the ZATCA’s Settlement Committee to reduce
the Zakat assessment so that it reaches (36,200,000) Saudi Riyals. The Company also filed an appeal to resolve tax disputes
against this assessment that was rejected. Thus, it is currently working to settle this obligation.
- During the year ending December 31, 2021G, the Company received an preliminary assessment from ZATCA for the years
2019G and 2020G, with an additional liability of (9,600,000) Saudi Riyals. The Company filed an objection to the General
Secretariat of Zakat Committees (Higher Committees) against this assessment.
- The Company is also compliant with the VAT Law and its Implementing Regulations and is registered before the ZATCA
under tax number (300429165900003) according to a certificate issued on 12/02/1438H (corresponding to 24/08/2017G),
noting that it has been registered since 14 /04/1439H (corresponding to 01/01/2018G).
- On 11/01/1443H (corresponding to 19/08/2021G), the Company was subject to a fine of (10,000) Saudi Riyals by the
ZATCA, due to its failure to comply with the requirements of the tax invoice and display a certificate of compliance with the
VAT Law at the Khamis Mushait point of sale. The Company ultimately paid this fine.

146
9.6.3 Continuing Obligations According to the requirements of the Ministry of Human
Resources and Social Development
- A file has been opened before the Ministry of Human Resources and Social Development (Labor Office) under the unified
number (202308-1) according to the Saudization certificate. As of the date of publishing this Prospectus, the Company
benefits from the electronic services of the Ministry of Human Resources and Social Development; a Saudization certificate
has been issued to indicate that the Company is committed to the required Saudization percentage which is 79%, placing
it in the Platinum category, as per the Saudization certificate issued under No. (94822185-241457) dated 12/06/1445H
(corresponding to 25/12/2023G), which expires on 14/09/1445H (corresponding to 24/03/2024G).
- The Company is committed to the Wage Protection System as well as the organized reporting of wages of its employees, under
a Wage Protection Commitment Certificate No. (20012311026480) dated 30/04/1445H (corresponding to 14/11/2023G). This
certificate is valid for a period of (60) days from the date of issuance, i.e., until 02/07/1445H (corresponding to 14/01/2024G),
and the percentage of compliance reached (97%) for the month of October 2023G.
- Further, the Company is committed to the requirements of the Ministry with respect to electronically documenting the
employment contracts of its employees with a compliance rate of (100%) as of November 2023G, according to a report
issued by Mudad platform.
- The Company is in compliance with Article (13) of Labor Law, which requires every employer to draft a Bylaws to his firm in
line with the Ministry’s model bylaws to organize work and announce it, in addition to any amendment made to it in a visible
place in the facility. The Company adopted an internal work organization regulation at the Ministry of Human Resources and
Social Development under No. (84572) dated 20/07/1441H (corresponding to 15/03/2020G).
- It should be noted that the Company has committed a number of violations of the Labor Law during the years 2020G and
2021G, and was subjected to fines by the Ministry of Human Resources and Social Development according to the following:

Table No. (94): Summary of Violations of The Ministry of Human Resources and Social Development

Type of
Violation Date of Violation Fine amount Status of Violation
Penalty

2020G

Failure to open a file and register 21/04/1442 H

The fine was paid on 22/04/1442H
points of sale in Jazan and Madina Al (corresponding to Fine SAR (20,000)
(corresponding to 07/12/2020G).
Munawarrah labor offices. 06/12/2020 G)
25/04/1442 H
The fine was paid on 29/04/1442H
Al-Ahsa point of sale panel is not visible. (corresponding to Fine SAR (500)
(corresponding to 14/12/2020G).
10/12/2020 G)

2021G

Failure to pay workers’ wages within a 06/09/1442 H

The fine was paid on 08/09/1442H
week at most from the end date of the (corresponding to Fine SAR (10,000)
(corresponding to 20/04/2021G).
contractual relationship. 18/04/2021 G)
Source: The Company

9.6.4 Continuing Obligations According to the Requirements of the General Organization

for Social Insurance (GOSI)
The Company has opened a file before GOSI under the membership number (502302655) and is participating in the pension and occupational
hazards branches for Saudi and non-Saudi employees according to GOSI certificate number (59734811) dated 12/06/1445H (corresponding to
25/12/2023G). The amount of the contributions paid for the year 2022G amounted to (4,925,522.08) Saudi Riyals.

9.6.5 Continuing Obligations According to the Requirements of the Ministry of Municipal,

Rural Affairs and Housing
- The Company must obtain a municipal licenses for its administrative offices branches, and points of sale; in order to occupy
them, taking into consideration that the Municipality or secretariat requires the submission of the following documents: the
Register of Commerce, By-laws, lease contract and building permit for the rented building, food establishment or shop and
warehouse and real estate license and a remote photograph of the building with the billboard (with a copy of the billboard
bill and the property registration of the Company trademark to be used on the facade) in addition to the civil defense license.
- The Company has a number of (13) leased sites for the purpose of conducting its activities, which are used as administrative
offices for the head office, branches, and points of sale (for more information, please refer to Subparagraph (9.7.2) “Lease
Contracts” of Paragraph (9) “Legal Information” of this Section).
- The table below outlines the branches and points of sale operated by the Company and its obtainment of municipal licenses
and salamah certificates:

147
Table No. (95): Municipal Licenses and Salamah Certificates

Salamah
Municipal Commercial License Address According
No. Company Certificate
License No. Registration No. Expiration Date to Municipal License
(Civil Defense)

Ash-Sharqiyah /Eastern Province

Al Sagr 21/01/1446H Municipality - West Dammam
Cooperative
1. 440811699316 2051036871 (Corresponding to Municipality – Al Faisaliah
Insurance
27/07/2024G) District - Omar bin al-Khattab
Company
Street.
Salamah
Certificate No.
Al Sagr
09/09/1445H Riyadh Municipality - Olaya (44-0000884986-
Cooperative
2. 43047978494 1010243765 (Corresponding to Municipality - Al-Nuzha District - 2) Expires on
Insurance
19/03/2024G) Abu Bakr Al-Siddiq. 25/08/1445H
Company
(corresponding to
06/04/2024G)
Salamah
Certificate No.
Al Sagr
06/13/1446H Tabuk Region Municipality-South (44-000697881-
Cooperative
3. 39066620 3550027342 (corresponding to to Municipality-Al Saadah District 3) Expires on
Insurance
12/14/2024G) -Ali bin Abi Talib Street 09/08/1445H
Company
(corresponding to
19/02/2024G)
Salamah
Certificate No.
Branch of Al
28/03/1446H Al Qassim Region Municipality (44-000384067-
Sagr Cooperative
4. 3909362370 1131046600 (corresponding to - Deira Sub-Municipality - Al- 4) Expires on
Insurance
01/10/2024G) Marqab District. 08/09/1445H
Company
(corresponding to
18/03/2024G)
Salamah
Certificate No.
Al Sagr
16/01/1446H Hail Region Municipality - Al- (44-000959852-
Cooperative
5. 43099747396 3350044740 (corresponding to Wasat Municipality – Al Aziziyah 2) Expires on
Insurance
22/07/2024G) Disrict. 14/01/1446H
Company
(corresponding to
20/07/2024G)
Al Sagr
07/07/1446H
Cooperative Najran Municipality – Najran Sub
6. 3909105351 5950022375 (corresponding to Non-Compliant
Insurance Municipality - Al-Fahd District.
07/01/2025G)
Company
Al Sagr
17/08/1445H Jazan Municipality - Jazan Sub-
Cooperative
7. 40082143103 5900027845 (corresponding to Municipality - Al-Safa District Non-Compliant
Insurance
27/02/2024G) -39A Street.
Company
Al Sagr
22/07/1445H Al-Bahah Municipality - Al-Bahah
Cooperative
8. 42095518726 5800014660 (corresponding to Sub-Municipality - Market Non-Compliant
Insurance
03/02/2024G) District.
Company
Al Sagr
19/05/1446H Eastern Province Municipality –
Cooperative
9. 43016058616 2051036871 (corresponding to Al Qatif Municipality - Warehouse Non-Compliant
Insurance
21/11/2024G) District.
Company
Salamah
Certificate No.
Al Sagr
07/04/1446H Riyadh Municipality - Al-Shifa (45-001024213-
Cooperative
10. 440310727933 1010243765 (corresponding to Sub-Municipality - Al-Marwa 2) Expires on
Insurance
10/10/2024G) District – Al Khalil Street. 13/05/1446H
Company
(corresponding to
15/11/2024G)
Al Sagr
22/01/1446H Al-Ahsa Municipality - Mubarraz
Cooperative
11. 441112358031 2051036871 (corresponding to Sub-Municipality - Ain Najm Non-Compliant
Insurance
28/07/2024G) District -Ibn Al-Qassas Street.
Company

148
 Salamah
Municipal Commercial License Address According
No. Company Certificate
License No. Registration No. Expiration Date to Municipal License
(Civil Defense)

Salamah
Certificate No.
Branch of Al
29/07/1445H Riyadh Municipality-Rawda Sub- (44-000165135-
Sagr Cooperative
12. 42034117138 1010414342* (corresponding to Municipality-Al Rawdah -Hafsa 6) Expires on
Insurance
10/02/2024G) bint Omar. 16/08/1445H
Company
(corresponding to
26/02/2024G)
Al Sagr Municipality of Madinah Region
23/12/1445H
Cooperative - Quba Municipality - Al-Rawabi
13. 40112492006 4650060439 (corresponding to
Insurance District - Muhammad bin Ahmed
29/06/2024G)
Company bin Abi Al-Sagr.
Source: The Company
*This certificate was issued on a canceled registration number.

The Company adheres to the requirements and regulations of the Ministry of Municipal, Rural Affairs and Housing, However, it did not obtain
a salamah certificate for a number of branches and points of sale.

9.6.6 Continuing Obligations According to the CMA Requirements

- The CMA required all listed companies on Saudi Stock Exchange to adhere to the Rules on the Offer of Securities and
Continuing Obligations (OSCOs) and CMA’s instructions in particular the reporting requirements of material and financial
developments and the Board’s annual report.
- The annual financial results announced on Tadawul website must be derived from the audited financial statements approved
by the Company’s external auditor appointed by the OGA and approved by the Board. The Company must adhere to the
CMA’s Instructions for Companies Announcement with respect to the disclosure of its financial results. The Company must
also provide a statement of all the causes and effects of the changes in the financial results for the current fiscal year with the
comparison period, so that the reasons include all the items of the financial results announcement
- The CMA required listed companies in the Capital Market to disclose the stages of their compliance with the transition to
the (IFRS). On 26/11/1437H (corresponding to 29/08/2016G), the Company announced on the Tadawul website that since its
incorporation, it has been applying (IFRS), and annually indicating this in the announced financial statements.
- The CMA required public joint stock companies to comply with the Instructions for Companies Announcement which was
issued pursuant to the CMA Board Decision No. No. (1-199-2006) dated 18/07/1427H (corresponding to 12/08/2006G) and
amended pursuant to Resolution No. (3-79-2023) dated 19/02/1445H (corresponding to 04/09/2023G).
- The Company adheres to the requirement of appointing authorized representatives before the CMA with respect to all matters
pertaining to the Capital Market Law and its Implementing Regulations. The Board appointed on 20/05/1445H. (corresponding
to 04/12/2023G) the following members as representatives: Yasser Mohammed Al-Harbi (Managing Director) and Ghaya
Abdul Aziz Buhaliqa (Legal Representative).
- The Authority also requires listed companies to comply with the Implementing Regulations of the Companies Law for
Listed Joint Stock Companies issued by the Board of the CMA pursuant to Resolution No. (8-127-2016) dated 16/01/1438H
(corresponding to 17/10/2016G) based on the Companies Law issued By Royal Decree No. (M/3) dated 28/01/1437H,
amended by Authority Board Resolution No. (2-26-2023) dated 05/09/1444H (corresponding to 27/03/2023G) and the
Companies Law issued by Royal Decree No. (M/132) dated 12/01/1443H, which requires the Board of a listed company
to disclose in its annual report details of the Remuneration policies, and mechanisms for determining such Remuneration,
including amounts in cash and in-kind benefits paid to each Board member in exchange for any executive, technical,
managerial, or advisory work or positions. The Company complied to disclose the remuneration received by Board members
for the fiscal years 2020G, 2021G, and 2022G.
- On 23/01/1438H (corresponding to 24/10/2016G), the CMA Board issued the resolution 1-130-2016 stipulating the
amendment of the procedures and instructions for companies whose shares are listed on Tadawul and whose accumulated
losses amounted to 50% or more of their capital according to the new Companies Law, the name of which has been amended
to “Procedures and Instructions Related to Listed Companies with Accumulated Losses reaching 20% or more of their
Share Capital” as amended by CMA Board resolution 1-77-2018 dated 05/11/1439H (corresponding to 18/07/2018G).
These procedures and instructions have been amended in accordance with CMA Board Resolution No. (8-5-2023) and dated
25/06/1444H (corresponding to 18/01/2023G). It should be noted that on 04/03/1444H (corresponding to 30/09/2022G), the
value of the Company’s accumulated losses amounted to (269,400,000) Saudi Riyals, as the percentage of losses exceeded
half of the capital, at a rate of (67.4%) of capital, amounting to four hundred million (400,000,000) Saudi Riyals. Since
the Company adhered to the CMA Regulations, especially to the procedures and instructions mentioned above, it has
taken the necessary measures to reduce the accumulated losses, as the Board of Directors submitted a recommendation
to the Shareholders on 05/02/1444H (corresponding to 01/09/2022G) for the purpose of reducing the Company’s capital
by canceling shares to amortize accumulated losses, and obtained the CMA approval to capital reduction on 09/03/1444H
(corresponding to 05/10/2022G).
- On 17/03/1444H (corresponding to 13/10/2022G), the GA of Shareholders (Extraordinary) approved reducing the Company’s
capital from four hundred million (400,000,000) Saudi Riyals to one hundred and forty million (140,000,000) Saudi Riyals

149
 divided into fourteen million (14,000,000) ordinary shares in order to amortize all accumulated losses equal to one hundred
and sixty million (260,000,000) Saudi Riyals by cancelling twenty-six million (26,000,0000) shares of the Company’s issued
shares, and the reduction percentage amounted to (65%) of the capital. On 28/05/1444H (corresponding to 22/12/2022G), the
Company announced a decrease in the value of the its accumulated losses to the equivalent of (12.12%) of the Company’s
capital.

Suspension of Trading Shares

- On 15/01/1443H (corresponding to 23/08/2021G), Saudi Tadawul announced the suspension of the Company’s shares for one
session on 15/01/1443H (corresponding to 23/08/2021G), provided that trading in the Company’s shares would resume for
twenty trading sessions starting from 16/01/1443H (corresponding to 24/08/2021G), following the session in which trading
was suspended. The Company is required to publish its financial statements before the end of 13/02/1443H (corresponding
to 20/09/2021G). However, due to the Company’s failure to announce the financial statements for Q2 of 2021G within the
statutory period, Saudi Tadawul announced on 14/02/1443H (corresponding to 21/09/2021G) the re-suspension of shares
starting from 14/02/1443H (corresponding to 21/09/2021G) until the financial statements are announced. On 26/04/1443H
(corresponding to 01/12/2021G), the Company announced its financial statements for the Q2 and Q3 of 2021G, and based
on the Market’s powers as stated in the Listing Rules, the Saudi Tadawul announced on 01/05/1443H (corresponding to
05/12/2021G) the lifting of the suspension on Trading the Shares, starting on 01/05/1443H (corresponding to 05/12/2021G).
- On 24/10/1443H (corresponding to 25/05/2022G), Saudi Tadawul announced the suspension of trading in the Company’s
shares due to its failure with announcing the financial statements for Q1 of 2022G during the statutory period and for one
session on 24/10/1443H (corresponding to 25/05/2022G), provided that trading shares will resume for twenty trading sessions
beginning from 25/10/1443H (corresponding to 26/05/2022G) following the session in which trading was suspended. The
Company must publish the financial statements before the end of 23/11/1443H (corresponding to 22/06/2022G). Due to the
Company’s failure to announce the financial statements for Q1 of 2022G during the statutory period, the Saudi Tadawul
announced on 24/11/1443H (corresponding to 23/06/2022G) suspending the Company shares starting from 24/11/1443H
(corresponding to 23/06/2022G), since it failed to publish its financial statements for the period ending on 31/03/2022G during
the specified statutory period. On 28/03/1444H (corresponding to 24/10/2022G), the Company announced its initial financial
statements for the period ending 30/06/2022G, and pursuant to the Market’s powers stipulated in the Listing Rules, Saudi
Tadawul announced lifting the suspension on Trading the Shares, starting on 29/03/1444H (corresponding to 25/10/2022G).

Table No. (96): Summary of the CMA Violations

Fine amount
Violation Date of Violation Type of Penalty Violation Status
(where applicable)

2020G

13/01/1442H
Failure to disclose the expiry of the CEO’s Payment was made on 02/03/1442H
(corresponding to Fine SAR (10,000)
mandate/term. (corresponding to 19/10/2020G).
01/09/2020G)

2022G

The Company did not adhere to the Statutory

28/04/1444H
deadline for publishing the financial
(corresponding to Warning -- --
statements contained in the instructions for
22/11/2022G)
corporate announcements.

2023G

The Company’s failure to notify the Authority

of the names of committee members and their
09/06/1444H
membership positions within five working
(corresponding to Warning -- --
days from the date of their appointment and
02/01/2023G)
the changes that occurred within five working
days from the date of the changes.
The Company’s failure to disclose
(20/03/1445H
immediately and without delay the signing of
Corresponding to Warning -- --
a contract with “Maharah Human Resources
05/10/2023G)
Company”.
Source: The Company

150
 - Regarding Corporate Governance, the table below shows the Company’s compliance with the Corporate Governance Regulations
issued by the Capital Market Authority:

Table No. (97): The Most Important Provisions of the Corporate Governance Regulations

Article of the
Corporate
Detailed Information Responsible Party Comment
Governance
Regulations

Provide a copy of the information nominees for

8/a Board of Directors Compliant
the membership on the Company’s website.
Establish a clear policy for the distribution of
stock dividends to achieve the interests of the
9/b Board of Directors Not Compliant – Absence of Independent Regulation
Company and shareholders as per the Company’s
bylaws.
Compliant - The financial statements for the
Review the financial statements for the year General Assembly of fiscal year ending on 31/12/2022G were reviewed
12/5
2022G. Shareholders by the OGA on 04/11/1444H (corresponding to
24/05/2023G)
Compliant - The Board of Directors’ report for the
Review the annual report of the Board of General Assembly of financial year ending on 31/12/2022G was reviewed
12/6
Directors for the year 2022G. Shareholders by the OGA on 04/11/1444H (corresponding to
24/05/2023G)
Compliant - Voted by OGA held on 04/11/1444H
(corresponding to 24/05/2023G) on appointing
Appoint the Company’s auditors, specifying an auditor for “Al-Kharashi & Partners Certified
General Assembly of
12/8 and 78 their fees reappoint them, dismissing them, and Accountants and Auditors” and “Price Waterhouse &
Shareholders
approve their reports. Partners Company” and determining his fees to audit
the statements of Q2, Q3, and the annual for the year
2023G and the Q1 of 2024G.
Publish the announcement of the date, location
13/d and agenda of the GA at least 21 days before the Board of Directors Compliant
date on the Company’s website.
Make it available to shareholders through the
Company’s website - upon publishing the
invitation to hold the GA - to obtain information
14/c related to the items on the GA’s agenda, Board of Directors Compliant – Through theTadawul website
especially the report of the BOD, the auditor, the
financial statements, and the report of the audit
committee.
Establishing plans, policies, strategies and main
21/1 Board of Directors Compliant
objectives for the Company
Setting rules and procedures for internal
control and general overseeing them thereof,
including: developing a written policy to
address actual and potential “conflicts of
interest” cases for each of the Board, Senior
Management, and shareholders. This includes
misuse of the Company’s assets and facilities,
and mismanagement resulting from transactions
with related persons. Ensure the integrity of the
financial and accounting rules, including rules
Compliant – The Company has a conflict-of-interest
21/2 relating to preparing financial reports. Ensure Board of Directors
regulation
the implementation of appropriate control
procedure for risk assessment and management
by generally forecasting the risks that the
Company may encounter. Create an environment
which is aware of the culture of risk management
at the Company level, and disclosing such risk
it transparently to the stakeholders and parties
related to the Company the effectiveness of the
Company’s internal control procedures on an
annual basis.
Setting forth specific and explicit policies,
standards and procedures for membership
in the Board, without prejudice to the General Assembly of Compliant - The Company has a policy of
21/3
mandatory provisions of these Regulations, and Shareholders nomination criteria for Board membership
implementing them following approval by the
General Assembly.

151
 Article of the
Corporate
Detailed Information Responsible Party Comment
Governance
Regulations

Develop a written policy that regulates the

relationship with stakeholders pursuant to
the provisions of the Corporate Governance
Regulations, and it must cover - in particular
– the following: Methods to compensate
Stakeholders when their rights established by
laws or protected by contracts are infringed;
Methods for resolving complaints or disputes
that may arise between the Company and the Compliant - The Company has a policy that regulates
21/4 Board of Directors
Stakeholders; relationships with stakeholders
Rules of professional conduct for Company
managers and employees that are prepared in
compliance with the proper professional and
ethical standards and regulate their relationship
with Stakeholders, provided that the Board
shall establish mechanisms for supervising the
implementation of, and compliance with such
rules.
Developing a written policy that regulates the
Committed - The Company has a disclosure and
21/5 relationship with Stakeholders pursuant to the Board of Directors
transparency policy
provisions of these Regulations
Establish policies and procedures that ensure
the Company’s compliance with laws and
regulations and its commitment to disclosing
essential information to shareholders and
stakeholders, and verifying the Senior
Management’s compliance. Form specialized
21/13, 47, 57, 57/A committees emanating from the BOD with Compliant – The Company has formed 5
Board of Directors
and 61 decisions specifying the duration of the Committees.
committee, its powers and responsibilities, and
how the Board will monitor it, provided that the
formation decision includes naming the members
and specifying their tasks, rights and duties,
along with an evaluation of the performance and
work of these committees and their members.
Approve and develop internal policies in respect
of the Company’s business, including specifying
22/1 Board of Directors Compliant
the duties, competencies and responsibilities
assigned to the various organisational levels;
Approving a written and detailed policy that
identifies the powers delegated to the Executive
Management, a matrix stating these powers, Compliant – The delegated authority to Senior
21/2 means of implementation and the period of . Board of Directors Management has been adopted by the Board on
delegation. The Board may request the Executive 28/08/1444H (corresponding to 20/03/2023G)
Management to submit periodic reports in
respect of its exercise of such delegated powers.
Compliant – Dr. Yasser Al-Harbi has been appointed
as a Managing Director and assumed all necessary
24 Appoint a CEO Board of Directors executive duties to manage the Company in
accordance with the Board of Directors’ resolution
dated 12/07/1445H (corresponding to 25/01/2024G)
Proposing the organisational and human Compliant – The organizational structure has
25/5 resources structures of the Company and Board of Directors been approved by the BOD on 12/07/1445H
presenting them to the Board for approval. (corresponding to 25/01/2024G)
Proposing the policy and types of remunerations
granted to employees, such as fixed
Compliant - According to the Corporate Governance
25/10 remunerations, remunerations linked to Board of Directors
Regulations
performance and remunerations in the form of
shares;
Develop an explicit and written policy to deal
with actual and potential conflicts of interest
situations which may affect the performance of
Compliant - The Company has a conflict-of-interest
41 Board members, a member of its committees, Board of Directors
policy.
or the Executive Management or any other
employees of the Company when dealing with
the Company or other Stakeholders.

152
 Article of the
Corporate
Detailed Information Responsible Party Comment
Governance
Regulations

The Company’s General Assembly shall issue

- based on a proposal from the BOD - the work
regulations of the Audit Committee, provided
that this regulation includes the controls and Compliant - The Audit Committee’s work regulations
General Assembly of
51/H procedures for the Committee’s work, duties, the were approved by the OGA held on 10/03/1442H
Shareholders
rules for selecting its members, their nomination, (corresponding to 27/10/2020G).
the duration of their membership, their rewards,
and the mechanism for appointing members
temporarily in the event of vacancies.
Compliant – The members of the Audit Committee
51 and 54 Formation of the Audit Committee Board of Directors were appointed by the BOD held on 05/06/1445H
(corresponding to 18/12/2023G).
Appoint the director of the internal audit unit or
Compliant -The Internal Audit Manager Mr. Imad
52/B/4 and 71 department or the internal auditor and suggest his Board of Directors
Mahdi Awani
remuneration.
The GA issue – based on a proposal from the
BOD - the work regulations of the Nominations
and Remuneration Committee, provided that this
Compliant - The Regulations of the Remuneration
regulation includes the committee’s controls,
General Assembly of and Nominations Committee were approved
57/B and 61/B procedures, and work plan, its duties, the rules
Shareholders by the OGA on 27/03/1442H (corresponding to
for selecting its members, how to nominate them,
27/10/2020G).
the duration of their membership, their rewards,
and the mechanism for appointing its members
temporarily in the event of vacancy.
The Nominations and Remuneration Committee
prepares a clear policy for the remuneration
of Board members and its committees and
Compliant – Board member remuneration policy for
the Executive Management, and presenting
General Assembly of the BOD, Committees and the Senior Management
58/1 such policy to the Board in preparation for
Shareholders members has been approved by the OGA held on
approval by the General Assembly, provided
13/01/1445H (corresponding to 31/07/2023G).
that such policy follows standards that linked to
performance, and disclosing and ensuring the
implementation of such policy.
Providing recommendations to the Board by the
nomination or the re-nomination of its members
Nomination and The policy of nomination criteria for Board members
in accordance with approved policies and
62/3 Remuneration that was approved by the OGA held on 03/03/1444H
standards, taking into account that nomination
Committee (corresponding to 29/09/2022G).
shall not include any person convicted of a crime
involving moral turpitude or dishonesty.
Publish the nomination announcement for
65 membership of the Board on the Company’s Board of Directors Non-Compliant
website.
Policies or procedures followed by stakeholders
Compliant – According to the Corporate Governance
81 in submitting their complaints or reporting Board of Directors
Regulations
violations
A policy of professional conduct and ethical Compliant - The Company has a code of professional
83 Board of Directors
values conduct policy.
Written disclosure policies, procedures and
Compliant According to the Corporate Governance
supervisory systems in accordance with the
86 Board of Directors Regulations and the Policy of Disclosure and
disclosure requirements contained in the
Transparency
Companies Law and the Financial Market Law
Publish the Audit Committee report on the
88/b Board of Directors Compliant
Company’s website
Corporate Governance Regulations that do not Compliant - The Corporate Governance Regulations
91 conflict with the mandatory provisions of the Board of Directors were approved by the OGA of Shareholders on
Governance Rules issued by the CMA 13/01/1445H (corresponding to 31/07/2023G).

Source: The Company

153
9.6.7 Continuing Obligations According to the Saudi Central Bank Requirements (Whose
Powers Related to Insurance Will Be Transferred to the Insurance Authority)
- The license of the Saudi Central Bank (SAMA) was issued under No. (TMN/13/20083) and dated 23/03/1429H (corresponding
to 31/03/2008G). It is valid for a period of (3) years starting from the date of renewal of the permit on 20/03/1444H
(corresponding to 16/10/2022G) and ending on 19/03/1447H (corresponding to 11/09/2025G), under this license, the
Company may practice insurance activity in the following branches (1) general insurance and (2) health insurance.
- The Company provides various types of insurance coverage to its customers according to standard conditions, and it may
not offer its products except upon obtaining the approval (final or temporary) of the Monetary Agency (currently the Central
Bank) for each product (pursuant to Article (16) of the Implementing Regulations). The Company has obtained, as of today,
final approvals from the Monetary Agency (currently the Central Bank) for a number of its insurance products (and for more
information about the Company’s insurance products, kindly refer to paragraph (3.10) “Products and Services” of Section
(3) “Company Overview and Nature of Business” of this Prospectus.).
- Conditions for Maintaining the License (SAMA License)
Article (76) of the Implementing Regulations of the Insurance Companies Control Law states that the Saudi Central Bank
shall request to withdraw the Company’s license if:

a. No business activities for a period of six months from the issuance date of the license.
b. None compliance with the Law and its Implementing Regulations.
c. Providing SAMA with false information in its licensing application.
d. Conducting its business and affairs in a manner that threatens to make it insolvent or that it is hazardous to its
policyholders, stockholders, or the public.
e. Insolvency, or its assets are not sufficient for carrying on its business.
f. The business is fraudulently conducted.
g. The paid-up capital falls below the prescribed minimum limit or failure to fulfil the provisions of Article 68.
h. The business or volume of activities falls to a limit that SAMA find unviable to operate under.
i. Refusal or delay of payments due to beneficiaries without just cause.
j. Refusal to be examined or to produce its accounts, record, or files for examination by SAMA.
k. Failure to pay a final judgment against it related to its insurance operation.

As of the date of this Prospectus, the Company is in compliance with Article (76) of the Implementing Regulations of the Insurance Companies
Control Law.

- With regard to paragraph (f) above of the conditions and with respect to the solvency requirements, the Company is required
to comply with Articles (66) and (68) of the Implementing Regulations which states that:

a. The Company shall maintain a solvency margin according to the standards specified, and implement the following
measures when its solvency margin falls below the required margin; it shall restore, in a period not exceeding the next
financial quarter, its solvency margin when it falls between the ranges of 75% to 100% of the required solvency margin
b. The Company shall restore its solvency margin when it falls between 50% and 75% of the required margin. The
company shall apply measures stated in paragraph (a) of this Article. If the required solvency margin is not restored
to its appropriate level for two consecutive financial quarters, the company shall formulate and provide SAMA with a
corrective action plan to be taken and the period necessary to restore its solvency
c. The Company shall restore its solvency margin when it falls between 25% and 50% of the required margin. The Company
shall apply measures stated in paragraph (b) of this Article; required solvency margin is not restored to its appropriate
level for two consecutive quarters, the company will be required by SAMA to take all or any of the following measures
immediately:

1. Increase the Company’s capital;

2. Adjust insurance premiums;
3. Reduce costs;
4. Stop underwriting business;
5. Assets liquidation; or
6. Any other measures deemed appropriate by the Company and approved by SAMA.

d. If the actual solvency margin falls below twenty-five percent (25%) or the Company fails to rectify its financial
conditions, the Central Bank may appoint a consultant to advise the Company, or request the withdrawal of its license.

154
 - As of 31/12/2022G, the solvency margin reached (72.6%), and accordingly the Company became subject to the procedures
stated in Paragraph (b) of Article (68) of the Implementing Regulations. The Company submitted a corrective plan to
the Saudi Central Bank in February 2023 explaining the steps it will take to improve its financial solvency, including the
necessary time period, in accordance with these requirements. The Company achieved the required solvency margin during
the third quarter of 2023G.
- On 28/02/1445H (corresponding to 13/09/2023G), the Board recommended to EGA to increase its capital to SAR (300
million), in compliance with the minimum required capital of insurance Companies and to support the Company’s financial
solvency margin. The Company obtained the Saudi Central Bank’s non-objection letter No. (134-23) dated 26/05/1445H
(corresponding to 10/12/2023G).
- It should be noted that the Company had previously been subjected to financial fines during the three years preceding the date
of this Prospectus according to the following information:

Table No. (98): The Saudi Central Bank Violations

Type of Fine amount

Violation Date of Violation Violation Status
Penalty (where applicable)

2020G

The Company’s non-compliance with the Cooperative

Insurance Companies’ Control Law:
- Intervention of a Board member in the Company’s
operational activities. 05/01/1442H Payment was made on
(corresponding to Fine SAR (140,000) 12/01/1442H (corresponding to
- Lack of independence of the Audit department.
24/08/2020G) 31/08/2020G).
- Deficiencies in the internal customer protection
policy.
- Lack of an approved remuneration policy.
30/04/1442H Payment was made on
Lack of consideration for sufficient social distancing
(corresponding to Fine SAR (5,000) 01/05/1442H (corresponding to
between employees in the workplace.
15/12/2020G) 16/12/2020G).

2021G

Al Sagr Company’s violation of the Central Bank’s

Draw the Company and Senior
supervisory and regulatory instructions regarding the
12/08/1442H Management attention to put in
transfer of compensation amounts due on claims linked Draw
(corresponding to -- place the necessary procedures in
to financial leased vehicle insurance policies without attention
25/03/2021G) order to avoid the occurrence of
providing the relevant financing company with data on a
such a violation in the future.
number of vehicles or claims for those compensations.
The Company violated the Central Bank’s supervisory 14/09/1442H The fine was paid on
and regulatory instructions regarding the requirements for (corresponding to Fine SAR (40,000) 11/10/1442H (corresponding to
actuarial business controls. 26/04/2021G) 23/05/2021G).
The Company violated the Central Bank’s supervisory
06/10/1442H The fine was paid on
and regulatory instructions by dealing with an insurance
(corresponding to Fine SAR (20,000) 11/10/1442H (corresponding to
brokerage company with an expired statement issued by
18/05/2021G) 23/05/2021G).
the Central Bank.
The Company failed to comply with the regulatory
requirements and instructions issued by the Central Bank 14/10/1442H The fine was paid on
related to precautionary and preventive measures to combat (corresponding to Fine SAR (15,000) 20/10/1442H (corresponding to
the COVID-19 virus in terms of the lack of consideration 26/05/2021G) 01/06/2021G).
for sufficient distancing space between employees.
The Company violated the Central Bank’s supervisory and
18/18121442H The fine was paid on
regulatory instructions in terms of not submitting a request
(corresponding to Fine SAR (20,000) 23/12/1442H (corresponding to
to obtain a written no-objection on the initial financial
28/07/2021G) 02/08/2021G).
statements for Q1 2021G.
The Company violated the Central Bank’s supervisory and
regulatory instructions in terms of:
Draw the Company and the
- Management did not commit to publishing the
Senior Management attention
violations regarding which executive decisions were 12/02/1443H
Draw to put in place the necessary
issued according to the formula contained in the table (corresponding to --
attention procedures to avoid the
specified in the circular, in the Board of Directors’ 19/09/2021G)
occurrence of such a violation in
report for 2020G.
the future.
- Failure to classify the topics of violations according to
topics specified in the circular.

2022G

155
 Type of Fine amount
Violation Date of Violation Violation Status
Penalty (where applicable)

- Issuing insurance policies to a related party (Chairman

of the Board of Directors) before paying the full
premium due.
- Failure to immediately inform the Central Bank of a 03/11/1443H The fine was paid on
decline in the rating of the reinsurer (Al Sagr National (corresponding to Fine SAR (160,000) 16/11/1443H (corresponding to
Company) below the required level. 02/06/2022G) 15/06/2022G).
- The Audit Committee did not study the actuary’s
reports during 2020G and make recommendations to
the Board.
- Correcting the aforementioned violations within 4
months.
- The BOD held a meeting within (20) working days.
- Providing the Central Bank with a copy of the minutes 07/03/1444H
of the Board’s meeting held within 5 days from the (corresponding to Warning -- --
date convening. 03/10/2022G)
- Providing the Central Bank with a monthly report
from the date of the Board’s meeting in this regard,
showing the level of progress in correcting the
aforementioned violations.

2023G

22/01/1445H
The Company violated the Central Bank’s supervisory and
(corresponding to Warning -- --
regulatory instructions.
09/08/2023G)
28/02/1445H
Commitment to correcting the comments contained in the
(corresponding to Warning -- --
security campaign and deliver it effectively.
13/09/2023G)
Source: The Company

y Supervisory Check Visits

The Company adheres to the Insurance Law in terms of allowing the SAMA officials to carry out their duties during the supervisory check
visit when checking its premises and allowing them to inspect all documentations and registers. The Company was subject to multiple visits
by SAMA official, and the latest one took place on 02/04/1445H (corresponding to 17/10/2023G) until the date of this Prospectus. However, it
did not receive any comments or remarks after the inspection visit held on this date.

9.6.8 Continuing Obligations According to the Requirements of the Council of Health

Insurance (CHI) (Whose powers Related to Insurance will Be Transferred to the
Insurance Authority)
- The health/medical insurance services are subject to CHI rules after obtaining the Saudi Central Bank’s non-objection letter
(SAMA previously). The CHI supervises insurance Companies ensures that they comply with the its requirements pertaining
to health insurance services.
- According to Article (43) of the CHI implementing regulations, insurance Companies are not allowed to carry out insurance
activities unless they are qualified by the Council, noting that the qualification is limited to a period of 3 years renewable
for similar periods. Furthermore, Article (44) of the implementing regulations of the health insurance law provides that
Cooperative insurance Companies are qualified to practice health insurance upon the submission of an application to this
purpose, and the Council may determine whatever details it deems appropriate related to the nature and scope of the data
that must be included in these applications within the limits of what is necessary for that, and the Council decides on the
qualification application within ninety days from the Submission date of the application
- The CHI supervises the insurance Company ensures compliance with the conditions regulating the provision of medical
insurance products such as:

a. Commitment to providing specialized medical personnel to grant health approvals within a time period not exceeding
(60) minutes. In the event of non-approval, the reasons have to be officially explained.
b. Commitment to paying the dues for the medical service providers such as hospitals and medical clinics within a period
not exceeding (45) days.

On 17/06/1444H (corresponding to 07/02/2023G), the CHI approved the renewal of the Company’s CHI license for a period
of one year ending on 05/08/1445H (corresponding to 15/02/2024G) pursuant to which the Company can carry out its health
insurance activities.

156
Disputes with the Insurance Board:
- The CHI Committee for Settlement of Disputes issued its resolution with respect to case No. (M 43/68) dated 17/11/1442H
(corresponding to 27/06/2021G), filed against the Company with respect to the violation by the Company of the insurance
policies. Subsequently, a final judgment has been issued against the Company for an amount of (295,600) Saudi Riyals for
the violation of the Health Insurance Law. The Company paid the amount on 15/06/1445H (corresponding to 28/12/2023G).

Violations
- During the previous three years, the Company committed a number of violations of the CCHI and its Implementing
Regulations which resulted in warnings and violations according to the following table:

Table No. (99): CHI Violations

Fine amount
Violation Date of Violation Type of Penalty Violation Status
(where applicable)

2021G

Violations observed during the visit of the assigned

General Secretariat team:
- Failure to adhere to the deductible rates according
to the Council’s circular for the minimum actual
benefit network for each treatment service as
stipulated in the unified document.
05/04/1442H
- Failure to adhere to the company’s approved Comments have been
(corresponding to comments --
financial policy for collecting premiums from answered.
01/17/2021G)
policyholders.
- Contracting with health care service providers not
accredited by the Council.
- Failure to pay medical claims to health service
providers within (45) working days from the date of
receipt of the claim.
The fine was not paid - a
letter was sent to the Council
Violating the provisions of the Cooperative Health of Health Insurance stating
Insurance System and its executive regulations in terms 12/29/1442H the company’s position
of the company’s violation of Paragraph (B) of Article (corresponding to a fine 205,000 Saudi Riyals regarding the observed
(14) of the Cooperative Health Insurance System and 08/08/2021G) observations and the
Articles (76) and (93) of the Executive Regulations. company is in the process
of filing an appeal with the
Board of Grievances.

2022G

01/25/1444H
Failure to adhere to the unified contract with all service
(corresponding to Warning -- --
providers they deal with.
08/23/2022G)
The Company’s failure to respond to the pre-approval
05/07/1444H
request for more than 60 minutes on the National
(corresponding to Warning -- --
Platform for Electronic Insurance Transactions
12/31/2022G)
(NPHIES).

2023G

Failure to upload health insurance documents to the

developed document issuance system within (48) hours
of receiving the insurance premium.
Failure to adhere to the specified periods for giving
medical approvals with health care service providers
within (60) minutes of receiving the approval request.
06/10/1444H
The company’s lack of commitment regarding doctors (corresponding to Warning -- --
who give medical approvals that they are specialists 04/26/2023G)
or above, licensed by the Commission for Health
Specialties.
Failure to pay medical claims to health service providers
within (30) days from the date of receipt of the claim,
according to the price list and mechanism agreed upon in
the contract signed between the two parties.
The company’s failure to comply with the provisions 10/14/1444H
of Article Eleven of the Beneficiaries Regulations, (corresponding to Warning -- --
Paragraphs (2), (3) and (4). 05/04/2023G)

157
 Fine amount
Violation Date of Violation Type of Penalty Violation Status
(where applicable)

The company is not committed to receiving the insurance

premium upon issuing the policy, and there is a period of 04/09/1445H
time exceeding (48) hours between the date of issuance (corresponding to Warning -- --
of the policy and the date of uploading the policy to the 10/24/2023G)
Council of Health Insurance law.
Source: The Company

9.7 Summary of Material Agreements

9.7.1 Related Parties Contracts and Transactions

- According to the Company’s financial statements for the fiscal year ending on December 31, 2022G, related parties represent
the main shareholders, directors and employees, and other companies controlled, jointly controlled, or substantially influenced
by entities. Pricing policies and terms of these transactions are approved and adopted by the Company’s Management and
Board.
- The table below outlines the related parties’ contracts and transactions during 2020G, 2021G, and 2022G and September
2023G:

Table No. (100): Related Parties’ Contracts and Transactions

Main Transactions with Related Parties

Transactions for the Transactions for the Transactions for the Transactions for the
Related Party Nature of Transactions year ending on year ending on year ending on Period ending on
31/12/2020G 31/12/2021G 31/12/2022G 30/09/2023G

Total written premiums 14,517,568 5,194,867 1,125,690 5,472

Lease expenses (1,174,472) (1,183,827) (334,534) -

Consulting services (552,278) - -

Reinsurance commission income 32,940 44,647 15,964 -

Shareholders Reinsurers’ share of claims paid 194,301 143,740 243,036 19,698

Assigned reinsurance premiums (461,381) (915,110) (4,371) -

Claims incurred (2,315,154) (4,372,340) (111,144) -

Board members’ remuneration

and meetings’ attendance (3,816,667) (3,931,111) - -
allowances

Related Parties’ Highest Balances

Receivable premiums collected

11,480,291 8,933,939 - -
from related parties
Shareholders Total outstanding claims payable (1,550,137) (874,603) - -

Reinsurance premiums credited (616,386) (529,196) 16,803 11,900

Directors’ remuneration and

Senior Executives (3,836,667) (4,238,611) (3,323,889) -
meetings’ attendance allowances

Key Management Personnel’s Compensations

Salaries and Benefits 11,754,884 11,327,804 10,237,483 5,097,907

Key Management
End-of-service Benefits 561,775 594,781 454,977 221,870
Personnel
Due for the Period - - - 5,319,777
Source: Financial Statements

158
 - It should be noted that Directors’ remuneration amounted to SAR (4,300,000), SAR (3,800,000), and SAR (3,300,000) for
the years ending on December 31, 2020G, 2021G, and 2022G, respectively.
- Due from related parties represents the required amounts owed to Saudi Al Sagr Insurance Company (a Bahraini closed joint
stock company) by those parties.
- Transactions with related parties are carried out under commercial terms and conditions, and the key management personnel’s
compensation is subject to the terms of employment contracts and the Company’s Bylaws.
- According to the Board of Directors’ report for the year 2022G, transactions with related parties, balances, and information
related to any business in which the Company is or was a party, and any member of the Company’s Board, Senior Executives,
or related party have interest, have been mentioned and are still valid during the year 2023G according to the following table:

Table No. (101): Related Parties’ Transactions According to the Board’s Report

Arrangement
Amount
Nature of the Nature of the
(Thousand SAR)
Related Party relationship/with Arrangement/ Duration Contract/Employment Terms
during the period
the company contract
from 01/01/2022G
until 31/12/2022G

According to the policy approved

Written insurance
by the regulatory authorities and (100)
premiums
without preferential benefits
Mr. Fahd Al-Turki According to the document
Abdul Rahman Ali Al Turki Board Chairman One year approved by the regulatory
Claims incurred (335)
Group authorities and without preferential
benefits
Office Lease
Without preferential benefits (100)
Expenses
According to the policy approved
Written insurance
by the regulatory authorities and 128
premiums
Mr. Abdullah Abdul Rahman without preferential benefits
Board Member One year
Al-Bassam, Al-Bassam Group According to the policy approved
Claims incurred by the regulatory authorities and (12)
without preferential benefits
Assigned/Cede According to the policy approved
Reinsurance by the regulatory authorities and (4)
Premiums without preferential benefits
According to the policy approved
Reinsurers’ share of
by the regulatory authorities and 243
claims paid
Mr. Abdullah Al-Sirri without preferential benefits
Mr. Majid Abdullah Al-Sirri According to the policy approved
Reinsurance
Mr. Abdul Mohsen Jaber Board Members One year by the regulatory authorities and 15
commission income
without preferential benefits
Al Sagr National Insurance
Company According to the policy approved
Claims incurred by the regulatory authorities and -
without preferential benefits
Other According to the policy approved
administrative by the regulatory authorities and 9
expenses without preferential benefits
Source: Board of Directors Report for 2022G

- The Company, its Board members, and Shareholders are committed to applying Articles (71) and (27) of the Companies Law.
These transactions were voted on in the Company’s OGA, which was held on 04/11/1444H (corresponding to 24/05/2023G)
and was conducted with related parties for the years 2022G and 2023G according to the following:
- Approval of the business and contracts concluded between the Company and Abdul Rahman Ali Al Turki Group of
Companies, in which the Board’s former member, Mr. Fahd bin Abdul Rahman Al Turki, has an indirect interest consisting
of insurance premiums for one year in exchange for (997,402) Saudi Riyals for the year 2022G. This agreement does not
have any preferential terms and conditions.
- Approval of the works and contracts concluded between the Company and Abdul Rahman Ali Al Turki Group of
Companies, in which the Board’s former member, Mr. Fahd bin Abdul Rahman Al Turki, has an indirect interest
consisting of a share of the total claims for one year in exchange for (99,520) Saudi Riyals for the year 2022G. This
agreement does not have any preferential terms and conditions.
- Approval of the business and contracts concluded between the Company and Abdul Rahman Ali Al Turki Group
of Companies, in which the Board’s former member, Mr. Fahd bin Abdul Rahman Al Turki, has an indirect interest
consisting of offices’ leases for one year for (334,534) Saudi Riyals for the year 2022G. This agreement does not have
any preferential terms and conditions.

159
 - Non-approval of the business and contracts concluded between the Company and Al Sagr National Insurance Company
(Dubai), in which the Board’s former members, Mr. Abdullah bin Juma Al-Sirri, Mr. Majid bin Abdullah Al-Sirri, Mr.
Abdul Mohsen bin Nafez Jaber, and Mr. Sultan bin Abdul Aziz Al-Suwaidi, have an indirect interest consisting of
reinsurance premiums for one year for (4,371) Saudi Riyals for the year 2022G. This agreement does not have any
preferential terms and conditions.
- Non-approval of the business and contracts concluded between the Company and Al Sagr National Insurance Company
(Dubai), in which the Board’s former members, Mr. Abdullah bin Juma Al-Sari, Mr. Majid bin Abdullah Al-Sari, Mr.
Abdul Mohsen bin Nafez Jaber, and Mr. Sultan bin Abdul Aziz Al-Suwaidi have an indirect interest consisting of the
reinsurer’s share of the insurance claims paid for one year, compared to (243,036) Saudi Riyals for the year 2022G. This
agreement does not have any preferential terms and conditions.
- Non-approval of the business and contracts concluded between the Company and Al Sagr National Insurance Company
(Dubai), in which the Board’s former members, Mr. Abdullah bin Juma Al-Sari, Mr. Majid bin Abdullah Al-Sari, Mr.
Abdul Mohsen bin Nafez Jaber, and Mr. Sultan bin Abdul Aziz Al-Suwaidi, have an indirect interest consisting of
reinsurance commissions from paid insurance claims for one year, compared to (15,964) Saudi Riyals for the year
2022G. This agreement does not have any preferential terms and conditions.
- Non-approval of the business and contracts concluded between the Company and Al Sagr National Insurance Company
(Dubai), in which the Board’s former members, Mr. Abdullah bin Juma Al-Sari, Mr. Majid bin Abdullah Al-Sari, Mr.
Abdul Mohsen bin Nafez Jaber, and Mr. Sultan bin Abdul Aziz Al-Suwaidi have an indirect interest consisting of other
administrative expenses for one year, compared to (9,005) for the year 2022G. This agreement does not have any
preferential terms and conditions.
- Approval of the business and contracts concluded between the Company and Abdullah Al-Bassam Group of Companies,
in which the Board’s former member, Mr. Abdullah Al-Bassam, has an indirect interest consisting of insurance premiums
for one year in exchange for (128,288) Saudi Riyals for the year 2022G. This agreement does not have any preferential
terms and conditions.
- Approval of the business and contracts concluded between the Company and Abdullah Al-Bassam Group of Companies,
in which the Board’s former member, Mr. Abdullah Al-Bassam, has an indirect interest consisting of a share of the total
claims for one year in exchange for (11,624) Saudi Riyals for the year. This agreement does not have any preferential
terms and conditions.
- The Company’s OGA, which was held on 03/03/1444H (corresponding to 29/09/2022G), voted on the transactions that took
place with related parties for the year 2021G:
- Non-approval of the business and contracts concluded between the Company and Abdul Rahman Ali Al Turki Group
of Companies, in which the Board’s former member, Mr. Fahd bin Abdul Rahman Al Turki, has an indirect interest
consisting of insurance documents for one year in exchange for (5,123,177) Saudi Riyals for the year 2021G. This
agreement does not have any preferential terms and conditions.
- Non-approval of the business and contracts concluded between the Company and Abdul Rahman Ali Al Turki Group
of Companies, in which the Board’s former member, Mr. Fahd bin Abdul Rahman Al Turki, has an indirect interest
consisting of a share of the total claims for one year in exchange for (4,341,949) Saudi Riyals for the year 2021G. This
agreement does not have any preferential terms and conditions.
- Approval of the business and contracts concluded between the Company and Abdul Rahman Ali Al Turki Group
of Companies, in which the Board’s former member, Mr. Fahd bin Abdul Rahman Al Turki, has an indirect interest
consisting of offices’ leases for one year in exchange for (1,183,827) Saudi Riyals for the year 2021G. This agreement
does not have any preferential terms and conditions.
- Approval of the business and contracts concluded between the Company and Al Sagr National Cooperative Insurance
Company (Dubai), in which the Board’s former members, Mr. Abdullah bin Juma Al-Sirri, Mr. Majid bin Abdullah Al-
Sirri, Mr. Abdul Mohsen bin Nafez Jaber, and Mr. Sultan bin Abdul Aziz Al-Suwaidi, have an indirect interest consisting
of reinsurance premiums for one year for (915,110) Saudi Riyals for the year 2021G. This agreement does not have any
preferential terms and conditions.
- Approval of the business and contracts concluded between the Company and Al Sagr National Cooperative Insurance
Company (Dubai), in which the Board’s former members, Mr. Abdullah bin Juma Al-Sirri, Mr. Majid bin Abdullah Al-
Sirri, Mr. Abdul Mohsen bin Nafez Jaber, and Mr. Sultan bin Abdul Aziz Al-Suwaidi, have an indirect interest consisting
of the reinsurer’s share of claims paid for one year in exchange for (143,740) Saudi Riyals for the year 2021G. This
agreement does not have any preferential terms and conditions.
- Approval of the business and contracts concluded between the Company and Al Sagr National Cooperative Insurance
Company (Dubai), in which the Board’s former members, Mr. Abdullah bin Juma Al-Sirri, Mr. Majid bin Abdullah Al-
Sirri, Mr. Abdul Mohsen bin Nafez Jaber, and Mr. Sultan bin Abdul Aziz Al-Suwaidi have an indirect interest consisting
of commissions on reinsurance for a period of one year, compared to (44,647) Saudi Riyals for the year 2021G, This
agreement does not have any preferential terms and conditions.
- Approval of the business and contracts concluded between the Company and Abdullah Al-Bassam Group of Companies,
in which the Board’s former member, Mr. Abdullah Al-Bassam has an indirect interest consisting of insurance premiums
for one year in exchange for (71,690) Saudi Riyals for the year 2021G. This agreement does not have any preferential
terms and conditions.

160
 - Approval of the business and contracts concluded between the Company and Abdullah Al-Bassam Group of Companies,
in which the Board’s former member, Mr. Abdullah Al-Bassam, has an indirect interest consisting of a claim in an
insurance policy for one year in exchange for (30,391) Saudi Riyals for the year 2021G. This agreement does not have
any preferential terms and conditions.
- The Company’s OGA, which convened on 20/08/1443H (corresponding to 23/03/2022G), voted on the transactions that took
place with related parties for the year 2020G:
- Approval of the business and contracts for the year 2020G, which were concluded between the Company and Abdul
Rahman Ali Al Turki Group of Companies, in which the Board’s former member, Mr. Fahd bin Abdul Rahman Al Turki,
has an indirect interest consisting of the rental of offices for one year in exchange for (1,174,472) Saudi Riyals. This
agreement does not have any preferential terms and conditions.
- The Company’s OGA, which was held on 07/11/1442H (corresponding to 17/06/2021G) voted on the transactions that took
place with related parties for the year 2020G:
- Non-approval of the business and contracts concluded between the Company and Abdul Rahman Ali Al Turki Group in
which the Board’s former member, Mr. Fahd bin Abdul Rahman Al Turki, has an indirect interest consisting of insurance
policies for one year in exchange for (13,707,906) Saudi Riyals. This agreement does not have any preferential terms
and conditions.
- Non-approval of the business and contracts concluded between the Company and Abdul Rahman Ali Al Turki Group in
which the Board’s former member, Mr. Fahd bin Abdul Rahman Al Turki, has an indirect interest consisting of share of
total claims for one year in exchange for (2,220,870) Saudi Riyals. This agreement does not have any preferential terms
and conditions.
- Non-approval of the business and contracts concluded between the Company Abdul Rahman Ali Al Turki Group in
which the Board’s former member, Mr. Fahd bin Abdul Rahman Al Turki has an indirect interest consisting of a one-year
office lease for (1,174,472) Saudi Riyals. This agreement does not have any preferential terms and conditions.
- Approval of the business and contracts concluded between the Company and Al Sagr National Insurance Company
(Dubai), in which the Board’s former member, Mr. Abdullah bin Juma Al-Sari has an indirect interest consisting of
reinsurance premiums for one year in exchange for (461,381) Saudi Riyals. This agreement does not have any preferential
terms and conditions.
- Approval of the business and contracts concluded between the Company and Al Sagr National Insurance Company
(Dubai), in which the Board’s former member, Mr. Majid bin Abdullah Al-Sari has an indirect interest consisting of
reinsurers’ share of the claims paid for one year in exchange for (194,301) Saudi Riyals. This agreement does not have
any preferential terms and conditions.
- Approval of the business and contracts concluded between the Company and Al Sagr National Insurance Company
(Dubai), in which the Board’s former member, Mr. Abdul Mohsen bin Nafez Jaber has an indirect interest consisting
of commissions for reinsurance for one year in exchange for (32,940) Saudi Riyals. This agreement does not have any
preferential terms and conditions.
- Approval of the business and contracts concluded between the Company and Al Sagr National Insurance Company
(Dubai), in which the Board’s former member, Mr. Abdul Mohsen bin Nafez Jaber has an indirect interest consisting of a
consulting agreement for one year in exchange for (552,278) Saudi Riyals. This agreement does not have any preferential
terms and conditions.
- Approval of the business and contracts concluded between the Company and Abdullah Al-Bassam Group in which the
Board’s former member, Mr. Abdullah Al-Bassam has an indirect interest consisting of insurance premiums for one year
in exchange for (133,617) Saudi Riyals. This agreement does not have any preferential terms and conditions.
- Approval of the business and contracts concluded between the Company and Abdullah Al-Bassam Group in which the
Board’s former member, Mr. Abdullah Al-Bassam has an indirect interest consisting of a claim in an insurance policy
for one year in exchange for (40,828) Saudi Riyals. This agreement does not have any preferential terms and conditions.
- Non-approval of the business and contracts concluded between the Company and Nasser Ahmed Al-Binali Holding
Group in which the Board’s former member, Mr. Bassam bin Ahmed Al-Binali has an indirect interest consisting of
insurance policies for one year in exchange for (664,267) Saudi Riyals. This agreement does not have any preferential
terms and conditions.
- Non-approval of the business and contracts concluded between the Company and Nasser Ahmed Al-Binali Holding
Group in which the Board’s former member, Mr. Bassam bin Ahmed Al-Binali has an indirect interest consisting of
insurance claims for one year in exchange for (119,705) Saudi Riyals. This agreement does not have any preferential
terms and conditions.
- Non-approval of the business and contracts concluded between the Company and the Board’s former member, Mr.
Abdul Mohsen Al-Sunaid, in which he has a direct interest and consisting of a one-year insurance policy in exchange for
(11,778) Saudi Riyals. This agreement does not have any preferential terms and conditions.
- Non-approval of the business and contracts concluded between the Company and the Board’s former member, Mr.
Abdul Mohsen Al-Sunaid, in which he has a direct interest and consisting of a one-year insurance claim in exchange for
(15,571) Saudi Riyals. This agreement does not have any preferential terms and conditions.

161
9.7.2 Lease Contracts
- As a tenant, the Company and its branches concluded (13) lease contracts for offices to carry out its business activity, and
they are as follows:

Table No. (102): Summary of Lease Contracts

Property
No. Lessor Property Type Lease Value Lease Duration Renewal Notes
Location

Electronically
documented under No.
0-1/300001953890
Both parties agreed to
add the following note:
The tenant is obligated
to submit all drawings
and plans for decoration
(1,095) days The lease term ends and duct works air
starting on with the expiration conditioning, electrical
7719, Omar Bin 17/05/1442H of the contract term, installations, etc. that
Al-Khuraiji Al Khattab, Al (corresponding and if both parties he wishes to add as
Showroom in 210,000 Saudi prepared by an approved
1. Real Estate Faisaliah District, to 01/01/2021G) wish to renew,
a mall Riyals engineering office to
Company Dammam, 4549- and ending on a new contract
32272 18/06/1445H agreed upon by get the lessor’s approval
(corresponding to both parties shall be before starting work. The
31/12/2023G). written. tenant has the right to
vacate the rental unit with
written notice addressed
to the landlord at least 60
days before the end of any
year of the three years,
and the landlord has no
right to demand from the
tenant for the remaining
contract period.
The rental
period will be
automatically
(364) days starting
renewed for a
on 12/01/1444H
similar period
A store in a (corresponding
Saudi unless one party Electronically
Riyadh, 11224, residential and 41,750 Saudi to 10/08/2022G)
2. Investment notifies the other documented under No.
1254, 2546 commercial Riyals and ending on
Company of its desire to 1/20047689231
building – 22/01/1445H
terminate the
(corresponding to
contract 30
09/08/2023G).
days before the
expiration of the
rental period.
Electronically
documented with No.
0-1/300002597045
(1,825) days The lease term ends This contract is not
starting on with the expiration considered an executive
20/10/1442H of the contract term, document because of
Abu Bakr Al-
Khaled Johar (corresponding and if both parties additional terms or
Siddiq, 12473, A rental unit in 1,500,000
3. Mohammed Al to 01/06/2021G) wish to renew, conditions that provide if
Riyadh, 12473- a mall Saudi Riyals
Johar and ending on a new contract the tenant is two months
2423, Riyadh
14/12/1447H agreed upon by late in paying the rent, the
(corresponding to both parties shall be contract shall be canceled
31/05/2026G). written. and he shall bear all the
damages resulting from
the termination of the
contract.
The lease term ends
(364) days starting
with the expiration
on 08/06/1444H
of the contract term,
Jamal bin (corresponding
and if both parties Electronically
Abdullah bin Al Quds Street, A store in an 34,500 Saudi to 01/01/2023G)
4. wish to renew, documented under No.
Ahmed Al- 32632, 3667,8224 outdoor mall Riyals and ending on
a new contract 1/20674696977
Bayyat 18/06/1445H
agreed upon by
(corresponding to
both parties shall be
31/12/2023G).
written.

162
 Property
No. Lessor Property Type Lease Value Lease Duration Renewal Notes
Location

A draft that is not legally

binding – Electronically
documented under No.
0-1/300002061845
(1,095) days The lease term ends
starting on with the expiration Both parties agreed to add
17/05/1442H of the contract term, the following: The tenant
Suleiman 3099, Al has the right to vacate the
A store in a (corresponding and if both parties
Othman Marqab District, 61,500 Saudi store at the end of any of
5. commercial to 01/01/2021G) wish to renew,
Muhammad Buraidah,52359 Riyals the three rental years by
building and ending on a new contract
Al-Ajami 7688 giving at least 60 days’
18/06/1445H agreed upon by
(corresponding to both parties shall be written notice, and the
31/12/2023G). written. landlord does not have the
right to demand the rental
value from the tenant for
the remaining period of
the contract.
Electronically
documented under No.
1/300002373293
(1,094) days The lease term ends Both parties agreed to add
starting on with the expiration the following: The tenant
17/05/1442H of the contract term, has the right to vacate the
Abdul Rahman
Buraidah, Al- (corresponding and if both parties store at the end of any of
bin Saad bin 21,000 Saudi
6. Qassim, 52359, Apartment to 01/01/2021G) wish to renew, the three rental years by
Muhammad Riyals
7636, 3044 and ending on a new contract giving at least 60 days’
Al-Amer
18/06/1445H agreed upon by written notice, and the
(corresponding to both parties shall be landlord does not have the
31/12/2023G). written. right to demand the rental
value from the tenant for
the remaining period of
the contract.
The lease term ends
364) days starting
with the expiration
on 08/06/1444H
of the contract term,
A store in a (corresponding
Muhammad and if both parties Electronically
commercial 25,800 Saudi to 01/01/2023G)
7. Dhafer Saleh 65525, 6204, 3807 wish to renew, documented under No.
and residential Riyals and ending on
Al-Ghamdi a new contract 1/20513911807
building 18/06/1445H
agreed upon by
(corresponding to
both parties shall be
31/12/2023G).
written.
Electronically
documented under No.
3/20456878053

(1,095) days The lease term ends This contract is not an

starting on with the expiration executive document
22/01/1444H of the contract term, because there are
A store in a additional terms or
Saudi (corresponding and if both parties
Riyadh, 11224, commercial 125,250 Saudi conditions, so that the
8. Investment to 20/08/2022G) wish to renew,
1254, 2546 and residential Riyals tenant (the Company)
Company and ending on a new contract
building has the right to vacate the
25/02/1447H agreed upon by
(corresponding to both parties shall be unit at the end of any of
19/08/2025G). written. the three rental years by
sending a written notice
to the lessor 30 days
before the new rental
year.
The lease term ends
(365) days starting
with the expiration
on 21/08/1444H
of the contract term,
A store in a (corresponding
Ali Huwaidi and if both parties Electronically
commercial 65,000 Saudi to 13/03/2023G)
9. Salem Al- 47914, 2773, 9232 wish to renew, documented under No.
and residential Riyals and ending on
Otaibi a new contract 1/20448258297
building 02/09/1445H
agreed upon by
(corresponding to
both parties shall be
12/03/2024G).
written.

163
 Property
No. Lessor Property Type Lease Value Lease Duration Renewal Notes
Location

The lease term ends

(640) days starting
with the expiration
on 10/09/1444H
of the contract term,
Nizar (corresponding
and if both parties Electronically
Muhammad Oqda Road, A store in a 36,225 Saudi to 01/04/2023G)
10. wish to renew, documented under No.
bin Fahd Al- 55424, 7489, 4582 mall Riyals and ending on
a new contract 3/20714459931
Bayoud 30/06/1446H
agreed upon by
(corresponding to
both parties shall be
31/12/2024G).
written.
Electronically
documented under No.
0-1/300002127347
(1,095) days The lease term ends Both parties agreed to add
starting on with the expiration the following: The tenant
17/05/1442H of the contract term, has the right to vacate the
Suleiman bin
8607, Airport (corresponding and if both parties store at the end of any of
Mohammed A store in a 69,000 Saudi
11. District, Unayzah, to 01/01/2021G) wish to renew, the three rental years by
bin Abdullah mall Riyals
56461-3424 and ending on a new contract giving at least 60 days’
Al-Malouhi
18/06/1445H agreed upon by written notice, and the
(corresponding to both parties shall be landlord does not have the
31/12/2023G). written. right to demand the rental
value from the tenant for
the remaining period of
the contract.
A draft version and
not legally binding–
Electronically
documented
(1,096) days The lease term ends 300002507198
starting on with the expiration Both parties agreed to add
19/09/1442H of the contract term, the following: The tenant
Khaled bin
4278, Al-Zahir (corresponding and if both parties has the right to vacate the
Masoud bin A store in a 241,500 Saudi
12. District, Mecca, to 01/05/2021G) wish to renew, store at the end of any of
Mazyad Al mall Riyals
6243-24222 and ending on a new contract the three rental years by
Harithi
21/10/1445H agreed upon by giving at least 60 days’
(corresponding to both parties shall be written notice, and the
30/04/2024G). written. landlord does not have the
right to demand the rental
value from the tenant for
the remaining period of
the contract.
Electronically
documented under No.
0-1/300002127347
(1,095) days The lease term ends Both parties agreed to add
starting on with the expiration the following: The tenant
17/05/1442H of the contract term, has the right to vacate the
A store in a
Hussein bin 7308, Salman Al (corresponding and if both parties store at the end of any of
residential and 180,000 Saudi
13. Ali bin Hussein Farsi, Al Fahd, to 01/01/2021G) wish to renew, the three rental years by
commercial Riyals
Al-Ajami Najran and ending on a new contract giving at least 60 days’
building
18/06/1445H agreed upon by written notice, and the
(corresponding to both parties shall be landlord does not have the
31/12/2023G). written. right to demand the rental
value from the tenant for
the remaining period of
the contract.
Source: The Company

164
9.7.3 Services Provision Agreements
- The Company concluded (9) agreements for the provision of financial, legal, actuarial, financial collection, and technical
services.

9.7.4 Insurance Brokerage Contracts

- The Company has concluded a number of insurance brokerage contracts with Companies specialized in the field of insurance
brokerage, organized according to the laws of the KSA and licensed by the Central Bank and specialized in the field of
insurance brokerage. The aim of these contracts is to attract customers and facilitate the sale of the Company’s insurance
products to individuals, companies and other entities. In return, insurance brokers are entitled to a commission estimated at a
percentage of the premiums collected through the clients’ broker for each type of insurance.

9.7.5 Reinsurance Contracts

- A number of reinsurance agreements were concluded with Companies specialized in reinsurance activity. Under these
agreements, the Company reinsures all or part of the losses that may arise from its insurance policies to reduce its exposure
to losses in exchange for an agreed upon percentage.

9.7.6 Memorandum of Understanding (MoU) and Merger Agreement

- On 23/02/1444H (corresponding to 19/09/2022G), the Company signed a Memorandum of Understanding (MoU) with Gulf
Union Alahlia Cooperative Insurance Company to begin negotiations regarding a merger proposal, based on the fundamental
conditions specified in the MoU.
- On 30/08/1444H (corresponding to 22/03/2023G), the Company signed a binding merger agreement with Gulf Union Alahlia
National Cooperative Insurance Company, which revolve around merging Al Sagr Insurance Company into Alahlia Company
through an issuance of sixteen million one hundred and twenty-four thousand three hundred and seventeen (16,124,317) new
shares in Alahlia, in exchange for full capital shares of the Company which will cease to exist. It should be noted that on
14/02/1445H (corresponding to 30/08/2023G), The EGA of shareholders decided not to approve the provisions of the merger
agreement concluded between the Company and Alahlia to merge both insurance companies.

9.8 Trademark and Intellectual Property Rights

- The Company has a logo (Al Sagr Insurance) that it uses when carrying on business in dealings and transactions, and it has
been registered as a trademark at the Ministry of Commerce (Trademarks Department) under category (36), which is one of
the trademarks categories that specialize in (insurance services, financing matters, financial matters and real estate matters).
It will enable the Company to put its name and logo on the external facade of the building, offices or shops operated by
the Company, as it has registered the trademark and granted it the necessary legal protection in accordance with the Saudi
Trademark Law.
- The table below outlines the Company’s registered trademark:

Table No. (103): Trademark Registration Certificate

Registration Insurance Expiry

Name of the Owner Date of Registration Insurance Date Category Trademark
No. Date

03/07/1440H 26/04/1440H 26/04/1450H

Al Sagr Cooperative
1440008758 (corresponding to (corresponding to (corresponding to 36
Insurance Company
10/03/2019G) 02/01/2019G) 16/09/2028G)
Source: The Company

9.9 Insurance
The Company has concluded number of insurance policies to ward off some risks, which include:

y Health Insurance
Al Sagr Insurance Company issued a health insurance policy under No. (P/100/01/23/401500) that provides coverage to its employees
from 01/07/2023G until 30/06/2024G and includes (464) members.

This policy covers health care through the network of medical service providers appointed by the Company, provided that the case is
covered by insurance coverage. The coverage benefits and compensation include all current or new employees shown in the payroll,
(husband/wife, children - minimum: from the date of birth - maximum: up to 25 years, unmarried female children, including widows
and divorced women and according to the Company’s insurance policy- Orphans fostered by sponsoring families - the husband of a
Saudi female employee in the event that the husband works in the government sector, if the institution is exempted from compulsory
health insurance, or if he works in another sector that does not provide compulsory insurance, or if he is unemployed. Coverage includes
male children of Saudi females, provided that they are unemployed and unmarried until the age of (25) years, and their unmarried and
unemployed daughters (including widows and divorcees).

165
y Vehicle Insurance
According to the report issued by the Ministry of Interior (Tamm platform) on 13/11/2023G, the Company owns (6) vehicles with valid
insurance and (1) vehicle whose insurance is no longer valid.

9.10 Disputes and Litigations

- The Company is a party to a number of lawsuits, claims, regulatory and arbitration procedures, and labor cases filed either
against it in its capacity as the defendant or by it in its capacity as the plaintiff, as outlined in the below tables:

9.10.1 Lawsuits and Disputes Filed Against the Company as the Defendant
- As of the date of this Prospectus, the Company is a party to a number of lawsuits in its capacity as the defendant, as outlined
in the below table:

Table No. (104): Summary of Lawsuits and Disputes Filed Against the Company as the Defendant

Lawsuit Value
Lawsuit No. Parties to the Lawsuit Allegation Lawsuit Date Lawsuit Status
(SAR)

Claims

A lawsuit filed by a 27/11/1443H

A Claim for all Risk Auto
435864 plaintiff against Al Sagr (corresponding to 33,860 Exchange of Memos
Insurance
Insurance Company 26/06/2022G)
A lawsuit filed by a 19/04/1444H
A Claim for Personal
442406 plaintiff against Al Sagr (corresponding to 75,000 Exchange of Memos
Accidents Insurance
Insurance Company 13/11/2022G)
The plaintiff was awarded
a money judgment of SAR
A lawsuit filed a plaintiff 20/04/1444H
A Claim for all Risk Auto (24,418) representing the value of
442731 against Al Sagr Insurance (corresponding to 24,481
Insurance subsequent damage to the vehicle
Company 14/11/2022G)
- Initial Ruling (an appeal has been
filed).
The plaintiff was awarded a money
judgment of. SAR (84,000).
It represents the value of the
A lawsuit filed by a 05/05/1444H
A Claim for all Risk Auto subsequent damage to her vehicle,
442834 plaintiff against Al Sagr (corresponding to 95,000
Insurance and the amount of 1880 represents
Insurance Company 29/11/2022G)
compensation for transportation
bills and vehicle inspection - initial
ruling (an appeal has been filed).
A lawsuit filed by a 12/06/1444H
A claim for a
443632 plaintiff against Al Sagr (corresponding to 8,566 Exchange of Memos
Comprehensive Insurance
Insurance Company 05/01/2023G)
The plaintiff was awarded a money
judgement of SAR (190.70).
It represents the value of the
A lawsuit filed by a
04/12/1444H subsequent damage to his vehicle
plaintiff against Al Sagr A Claim for all Risk Auto
440109 (corresponding to 56,424 that is the subject of the lawsuit,
Cooperative Insurance Insurance
22/06/2023G) and the amount of 10,600 is
Company
equivalent to the value of the delay
in settling the claim - a preliminary
ruling (an appeal has been filed)
Oblige the defendant Al Sagr
Cooperative Insurance Company
A lawsuit filed by a to pay the plaintiff an amount
17/07/1444H
plaintiff against Al Sagr A Claim for Third-party of SAR (14,000) representing
441428 (corresponding to 14,000
Cooperative Insurance Auto Insurance vehicle damages resulting from
08/02/2023G)
Company the accident in question – First
instance judgement (an appeal has
been filed).
A lawsuit filed by a
18/01/1444H
plaintiff against Al-Sagr A Claim for Third-party
441128 (corresponding to 43,261 An appeal was filed.
Cooperative Insurance Auto Insurance
16/08/2022G)
Company

166
 Lawsuit Value
Lawsuit No. Parties to the Lawsuit Allegation Lawsuit Date Lawsuit Status
(SAR)

The plaintiff was awarded a money

25/02/1444H judgement of SAR (55,000).
A lawsuit filed by a A Claim for Third-party
441503D (corresponding to 95,000 It represents the value of the
plaintiff Auto Insurance
21/09/2022G) subsequent damage to her vehicle.
Appeal judgment.
A lawsuit filed by a
23/01/1444H
plaintiff against Al-Sagr A Claim for Third-party
441009R (corresponding to 1,400 Exchange of Memos
Cooperative Insurance Auto Insurance
21/08/2022G)
Company
The plaintiff was awarded a money
A lawsuit filed by a judgement of SAR (24481). This
10/07/1444H
plaintiff against Al-Sagr A Claim for all Risk Auto amount represents the value of
444196 (corresponding to 24,481
Cooperative Insurance Insurance subsequent damage to the vehicle.
01/02/2023G)
Company First instance judgement (an
appeal has been filed).
The plaintiff was awarded a
A lawsuit filed by a money judgement of amount of
23/07/1444H
plaintiff against Al-Sagr A claim for a SAR (10,000), representing the
441486 (corresponding to 10,000
Cooperative Insurance Comprehensive Insurance damages to the vehicle. First
14/02/2023G)
Company instance judgement (an appeal will
be filed).
A lawsuit filed by a
26/06/1444H
plaintiff against Al-Sagr A Claim for Personal
444574 (corresponding to 2,505 Exchange of Memos
Cooperative Insurance Accidents Insurance
19/01/2023G)
Company
A lawsuit filed by a
07/04/1444H
plaintiff against Al-Sagr A claim for a
444601 (corresponding to 80,000 Exchange of Memos
Cooperative Insurance Comprehensive Insurance
26/01/2023G)
Company
A lawsuit filed by a
02/08/1444H
plaintiff against Al-Sagr A Claim for Third-party
444687 (corresponding to 33,781 Exchange of Memos
Cooperative Insurance Auto Insurance
22/02/2023G)
Company
A lawsuit filed by a
25/07/1444H
plaintiff against Al-Sagr A claim for a
444632 (corresponding to 8,715 Exchange of Memos
Cooperative Insurance Comprehensive Insurance
16/02/2023G)
Company
A lawsuit filed by a
10/03/1444H
plaintiff against Al-Sagr A Claim for all Risk Auto
445659 (corresponding to 20,000 Exchange of Memos
Cooperative Insurance Insurance
23/04/2023G)
Company
A lawsuit filed by a
07/10/1444H
plaintiff against Al-Sagr A Claim for Third-party
445899 (corresponding to 1,150 Exchange of Memos
Cooperative Insurance Auto Insurance
27/04/2023G)
Company
A lawsuit filed by a
20/10/1444H
plaintiff against Al-Sagr A Claim for all Risk Auto
446103 (corresponding to 66,000 Exchange of Memos
Cooperative Insurance Insurance
10/05/2023G)
Company
A lawsuit filed by a
10/11/1444H
plaintiff against Al-Sagr A Claim for Third-party
446624 (corresponding to 35,194 Exchange of Memos
Cooperative Insurance Auto Insurance
30/05/2023G)
Company
A lawsuit filed by a
11/11/1444H
plaintiff against Al-Sagr A Claim for Third-party
446659 (corresponding to 3,000 Exchange of Memos
Cooperative Insurance Auto Insurance
31/05/2023G)
Company
A lawsuit filed by a
03/12/1444H
plaintiff against Al-Sagr A Claim for Third-party
447052 (corresponding to 2,662 Exchange of Memos
Cooperative Insurance Auto Insurance
21/06/2023G)
Company
A lawsuit filed by a
21/11/1444H
plaintiff against Al-Sagr A Claim for Third-party
447248 (corresponding to 2,651 Exchange of Memos
Cooperative Insurance Auto Insurance
10/06/2023G)
Company

167
 Lawsuit Value
Lawsuit No. Parties to the Lawsuit Allegation Lawsuit Date Lawsuit Status
(SAR)

A lawsuit filed by a
16/11/1444H
plaintiff against Al-Sagr A Claim for Third-party
447173 (corresponding to 16,000 Exchange of Memos
Cooperative Insurance Auto Insurance
05/06/2023G)
Company
A lawsuit filed by a
13/11/1444H
plaintiff against Al-Sagr A Claim for Third-party
447172 (corresponding to 1,281 Exchange of Memos
Cooperative Insurance Auto Insurance
02/06/2023G)
Company
A lawsuit filed by a
11/11/1444H
plaintiff against Al-Sagr A Claim for Third-party
447127 (corresponding to 4,000 Exchange of Memos
Cooperative Insurance Auto Insurance
31/05/2023G)
Company
A lawsuit filed by a
22/12/1444H
plaintiff against Al-Sagr A Claim for Third-party
447442 (corresponding to 25,450 Exchange of Memos
Cooperative Insurance Auto Insurance
10/07/2023G)
Company
A lawsuit filed by a
23/11/1444H
plaintiff against Al-Sagr A Claim for Third-party
447450 (corresponding to 7,812 Exchange of Memos
Cooperative Insurance Auto Insurance
12/06/2023G)
Company
A lawsuit filed by a
23/12/1444H
plainti against Al-Sagr A Claim for Third-party
447457 (corresponding to 1,800 Exchange of Memos
Cooperative Insurance Auto Insurance
11/07/2023G)
Company ff
A lawsuit filed by a
25/11/1444H
plaintiff against Al-Sagr A Claim for Third-party
447520 (corresponding to 738 Exchange of Memos
Cooperative Insurance Auto Insurance
14/06/2023G)
Company
A lawsuit filed by a
16/01/1445H
plaintiff against Al-Sagr A Claim for Third-party
450306 (corresponding to 35,000 Exchange of Memos
Cooperative Insurance Auto Insurance
03/08/2023G)
Company
A lawsuit filed by a
18/12/1444H
plaintiff against Al-Sagr A Claim for Third-party
447679 (corresponding to 20,000 Exchange of Memos
Cooperative Insurance Auto Insurance
06/07/2023G)
Company
A lawsuit filed by a
15/12/1444H
plaintiff against Al-Sagr A Claim for Third-party
447673 (corresponding to 33,862 Exchange of Memos
Cooperative Insurance Auto Insurance
03/07/2023G)
Company
A lawsuit filed by a
01/17/1445H
plaintiff against Al-Sagr A Claim for Third-party
450455 (corresponding to 166,239 Exchange of Memos
Cooperative Insurance Auto Insurance
08/04/2023G)
Company
A lawsuit filed by a
11/04/1444H
plaintiff against Al-Sagr A Claim for Third-party
450503 (corresponding to 5,949 Exchange of Memos
Cooperative Insurance Auto Insurance
24/05/2023G)
Company
A lawsuit filed by a
12/01/1445H
plaintiff against Al-Sagr A Claim for Third-party
450683 (corresponding to 707 Exchange of Memos
Cooperative Insurance Auto Insurance
30/07/2023G)
Company
The plaintiff, was awarded
a money judgement of SAR
(12,113). Compensation for vehicle
A lawsuit filed by a
25/08/1444H damage and an amount of SAR
plaintiff against Al-Sagr A Claim for Third-party
445389 (corresponding to 9,300 (13,700) represents compensation
Cooperative Insurance Auto Insurance
17/03/2023G) for the delay in settling the claim
Company
and SAR (100) for each day of
delay. First instance judgement (an
appeal was filed).
The plaintiff was awarded a
A lawsuit filed by a
16/08/1444H money judgement of SAR (9,450)
plaintiff against Al-Sagr A Claim for Personal
445418 (corresponding to 9,450 which represents compensation
Cooperative Insurance Accidents Insurance
08/03/2023G) for vehicle damage. First instance
Company
judgement (an appeal was filed).

168
 Lawsuit Value
Lawsuit No. Parties to the Lawsuit Allegation Lawsuit Date Lawsuit Status
(SAR)

A lawsuit filed by a
12/12/1444H
plaintiff against Al-Sagr A Claim for Third-party
451211 (corresponding to 13,733 Exchange of Memos
Cooperative Insurance Auto Insurance
30/06/2023G)
Company
A lawsuit filed by a
08/12/1444H
plaintiff against Al-Sagr A Claim for all Risk Auto
451173 (corresponding to 2,237 Exchange of Memos
Cooperative Insurance Insurance
26/06/2023G)
Company
A lawsuit filed by a
24/12/1444H
plaintiff against Al-Sagr A Claim for Third-party
451295 (corresponding to 11,187 Exchange of Memos
Cooperative Insurance Auto Insurance
12/07/2023G)
Company
A lawsuit filed by a
08/12/1444H
plaintiff against Al-Sagr A Claim for Third-party
451664 (corresponding to 4,204 Exchange of Memos
Cooperative Insurance Auto Insurance
26/06/2023G)
Company
A lawsuit filed by a
08/12/1444H
plaintiff against Al-Sagr A Claim for all Risk Auto
451637 (corresponding to 8,171 Exchange of Memos
Cooperative Insurance Insurance
26/06/2023G)
Company
A lawsuit filed by a
08/12/1444H
plaintiff against Al-Sagr A Claim for Third-party
451576 (corresponding to 1,375 Exchange of Memos
Cooperative Insurance Auto Insurance
26/06/2023G)
Company
A lawsuit filed by a
10/01/1445H
plaintiff against Al-Sagr A Claim for Third-party
451534 (corresponding to 17,120 Exchange of Memos
Cooperative Insurance Auto Insurance
28/07/2023G)
Company
A lawsuit filed by a
12/01/1444H
plaintiff against Al-Sagr A Claim for Third-party
451476 (corresponding to 17,300 Exchange of Memos
Cooperative Insurance Auto Insurance
19/06/2023G)
Company
A lawsuit filed by a
23/11/1444H
plaintiff against Al-Sagr A Claim for Third-party
451470 (corresponding to 8,430 Exchange of Memos
Cooperative Insurance Auto Insurance
12/06/2023G)
Company
A lawsuit filed by a
08/01/1445H
plaintiff against Al-Sagr A Claim for Third-party
451420 (corresponding to 35,000 Exchange of Memos
Cooperative Insurance Auto Insurance
26/07/2023G)
Company
A lawsuit filed by a
22/12/1444H
plaintiff against Al-Sagr A Claim for Third-party
451363 (corresponding to 45,558 Exchange of Memos
Cooperative Insurance Auto Insurance
10/07/2023G)
Company
A money judgment was awarded to
the plaintiff in the amount of SAR
(12,113). Compensation for vehicle
A lawsuit filed by a
25/08/1444H damage and an amount of SAR
plaintiff against Al-Sagr A Claim for Third-party
445389 (corresponding to 9,300 (13,700) represents compensation
Cooperative Insurance Auto Insurance
17/03/2023G) for the delay in settling the claim
Company
and SAR (100) for each day of
delay. First instance judgement (an
appeal was filed).
A lawsuit filed by a
16/01/1445H
plaintiff against Al-Sagr A Claim for Third-party
451839 (corresponding to 10,654 Exchange of Memos
Cooperative Insurance Auto Insurance
03/08/2023G)
Company
A lawsuit filed by a
22/01/1445H
plaintiff against Al-Sagr A Claim for Third-party
451853 (corresponding to 17,000 Exchange of Memos
Cooperative Insurance Auto Insurance
09/08/2023G)
Company
A lawsuit filed by a
20/01/1445H
plaintiff against Al-Sagr A Claim for all Risk Auto
451929 (corresponding to 15,218 Exchange of Memos
Cooperative Insurance Insurance
07/08/2023G)
Company

169
 Lawsuit Value
Lawsuit No. Parties to the Lawsuit Allegation Lawsuit Date Lawsuit Status
(SAR)

A lawsuit filed by a
28/12/1444H
plaintiff against Al-Sagr A Claim for Third-party
451951 (corresponding to 28,389 Exchange of Memos
Cooperative Insurance Auto Insurance
16/07/2023G)
Company
A lawsuit filed by a
20/12/1444H
plaintiff against Al-Sagr A Claim for Third-party
451993 (corresponding to 30,000 Exchange of Memos
Cooperative Insurance Auto Insurance
08/07/2023G)
Company
A lawsuit filed by a
plaintiff against Al-Sagr A Claim for Third-party
452062 2023G 46,933 Exchange of Memos
Cooperative Insurance Auto Insurance
Company
A lawsuit filed by a
08/01/1445H
plaintiff against Al-Sagr A Claim for all Risk Auto
452063 (corresponding to 14,200 Exchange of Memos
Cooperative Insurance Insurance
26/07/2023G)
Company
A lawsuit filed by a
11/02/1445H
plaintiff against Al-Sagr A Claim for Third-party
452842 (corresponding to 88,220 Exchange of Memos
Cooperative Insurance Auto Insurance
27/08/2023G)
Company
A lawsuit filed by by a
09/02/1445H
plaintiff against Al-Sagr A Claim for Personal
452763 (corresponding to 7,264 Exchange of Memos
Cooperative Insurance Accidents Insurance
25/08/2023G)
Company
A lawsuit filed by a
11/02/1445H
plaintiff against Al-Sagr A Claim for Third-party
452867 (corresponding to 1,500 Exchange of Memos
Cooperative Insurance Auto Insurance
27/08/2023G)
Company
A lawsuit filed by a
02/02/1445H
plaintiff against Al-Sagr A Claim for Third-party
452907 (corresponding to 1,057 Exchange of Memos
Cooperative Insurance Auto Insurance
18/08/2023G)
Company
A lawsuit filed by a
10/02/1445H
plaintiff against Al-Sagr A Claim for Third-party
452674 (corresponding to 1,386 Exchange of Memos
Cooperative Insurance Auto Insurance
26/08/2023G)
Company
A lawsuit filed by a
12/02/1445H
plaintiff against Al-Sagr A Claim for Third-party
453057 (corresponding to 23,000 Exchange of Memos
Cooperative Insurance Auto Insurance
28/08/2023G)
Company
The plaintiff, was awarded
A lawsuit filed by a a money judgement of SAR
19/06/1444H
plaintiff against Al-Sagr A Claim for Auto (71,845.27) which represents
445671 (corresponding to 71,845
Cooperative Insurance Insurance compensation for vehicle damage.
12/01/2023G)
Company First instance judgement (an
appeal was filed).
A lawsuit filed by a
07/02/1445H
plaintiff against Al-Sagr A Claim for Third-party
453551 (corresponding to 25,320 Exchange of Memos
Cooperative Insurance Auto Insurance
23/08/2023G)
Company
A lawsuit submitted by a
30/02/1445H
plaintiff against Al-Sagr A Claim for Third-party
453674 (corresponding to 1,315 Exchange of Memos
Cooperative Insurance Auto Insurance
15/09/2023G)
Company
A lawsuit filed by a
29/02/1445H
plaintiff against Al-Sagr A Claim for Third-party
454034 (corresponding to 16,284 Exchange of Memos
Cooperative Insurance Auto Insurance
14/09/2023G)
Company
A lawsuit filed by a
26/02/1445H
plaintiff against Al-Sagr A Claim for Third-party
453956 (corresponding to 10,000 Exchange of Memos
Cooperative Insurance Auto Insurance
11/09/2023G)
Company
A lawsuit filed by a
28/02/1445H
plaintiff against Al-Sagr A Claim for Third-party
453930 (corresponding to 32,000 Exchange of Memos
Cooperative Insurance Auto Insurance
13/09/2023G)
Company

170
 Lawsuit Value
Lawsuit No. Parties to the Lawsuit Allegation Lawsuit Date Lawsuit Status
(SAR)

A lawsuit filed by a
19/02/1445H
plaintiff against Al-Sagr A Claim for Third-party
453825 (corresponding to 8,000 Exchange of Memos
Cooperative Insurance Auto Insurance
04/09/2023G)
Company
A lawsuit filed by a
plaintiff against Al-Sagr A Claim for Third-party
445438 - 45,000 Exchange of Memos
Cooperative Insurance Auto Insurance
Company
A lawsuit filed by a
26/12/1444H
plaintiff against Al-Sagr A Claim for Third-party
454092 (corresponding to 4,000 Exchange of Memos
Cooperative Insurance Auto Insurance
14/07/2023G)
Company
A lawsuit filed by a
29/02/1445H
plaintiff against Al-Sagr A Claim for Third-party
454091 (corresponding to 25,000 Exchange of Memos
Cooperative Insurance Auto Insurance
14/09/2023G)
Company
The plaintiff, was awarded
A lawsuit filed by a a money judgement of
A Claim for Third- 01/04/1444H
plaintiff against Al-Sagr SAR (70,600). The value of
442036 party Cooperative Auto (corresponding to 90,800
Cooperative Insurance compensation for the damage
Insurance 26/10/2022G)
Company to the vehicle. First instance
judgement (an appeal was filed).
A lawsuit filed by a
A Claim for Auto 27/09/1444H
plaintiff against Al-Sagr
445775 Insurance - Medical (corresponding to 3,176 Exchange of Memos
Cooperative Insurance
Insurance 18/04/2023G)
Company
A lawsuit filed by a
01/03/1445H
plaintiff against Al-Sagr A Claim for all Risk Auto
454039 (corresponding to 1,230 Exchange of Memos
Cooperative Insurance Insurance
16/09/2023G)
Company
A lawsuit filed by a
15/08/1444H
plaintiff against Al-Sagr A Claim for Third-party Exchange of Memos/The decision
445044 (corresponding to 33,055
Cooperative Insurance Auto Insurance will be delivered on 10/04/1445H
07/03/2023G)
Company
A lawsuit filed by a
10/03/1445H
plaintiff against Al-Sagr A Claim for Third-party
454228 (corresponding to 7,551 Exchange of Memos
Cooperative Insurance Auto Insurance
25/09/2023G)
Company
A lawsuit filed by a
10/03/1445H
plaintiff against Al-Sagr A Claim for Third-party
454227 (corresponding to 80,000 Exchange of Memos
Cooperative Insurance Auto Insurance
25/09/2023G)
Company
A lawsuit filed by a
03/02/1445H
plaintiff against Al-Sagr A Claim for Third-party
454225 (corresponding to 1,214 Exchange of Memos
Cooperative Insurance Auto Insurance
09/17/2023G)
Company
A lawsuit filed by a
05/01/1445H
plaintiff against Al-Sagr A Claim for Third-party
454305 (corresponding to 2,000,000 Exchange of Memos
Cooperative Insurance Auto Insurance
23/07/2023G)
Company
A conciliation request
submitted by a plaintiff 20/03/1445H
A Claim for Third-party
250290 against Al-Sagr (corresponding to 20,751 Exchange of Memos
Auto Insurance
Cooperative Insurance 05/10/2023G)
Company
A lawsuit filed by a
04/03/1445H
plaintiff against Al-Sagr A Claim for Third-party
454454 (corresponding to 4,557 Exchange of Memos
Cooperative Insurance Auto Insurance
19/09/2023G)
Company
A lawsuit filed by a
26/02/1445H
plaintiff against Al-Sagr A Claim for Third-party
454418 (corresponding to 4,639 Exchange of Memos
Cooperative Insurance Auto Insurance
11/09/2023G)
Company

171
 Lawsuit Value
Lawsuit No. Parties to the Lawsuit Allegation Lawsuit Date Lawsuit Status
(SAR)

A lawsuit filed by a
19/02/1445H
plaintiff against Al-Sagr A Claim for Third-party
454447 (corresponding to 74,500 Exchange of Memos
Cooperative Insurance Auto Insurance
04/09/2023G)
Company
A lawsuit filed by a
09/03/1445H
plaintiff against Al-Sagr A Claim for Third-party
454431 (corresponding to 300,000 Exchange of Memos
Cooperative Insurance Auto Insurance
24/09/2023G)
Company
A lawsuit filed by a
21/01/1445H
plaintiff against Al-Sagr A Claim for Third-party
454514 (corresponding to 46,600 Exchange of Memos
Cooperative Insurance Auto Insurance
06/09/2023G)
Company
A lawsuit filed by a
11/03/1445H
plaintiff against Al-Sagr A Claim for Third-party
454493 (corresponding to 509,923 Exchange of Memos
Cooperative Insurance Auto Insurance
26/03/2023G)
Company
A lawsuit filed by a
21/01/1445H
plaintiff against Al-Sagr A Claim for Third-party
452167 (corresponding to 2,070 Exchange of Memos
Cooperative Insurance Auto Insurance
08/08/2023G)
Company
A lawsuit by a plaintiff
27/01/1445H
against Al-Sagr A Claim for all Risk Auto
452925 (corresponding to 12,904 Exchange of Memos
Cooperative Insurance Insurance
14/08/2023G)
Company
A lawsuit filed by a
17/03/1445H
plaintiff against Al-Sagr A Claim for Third-party
454595 (corresponding to 300,000 Exchange of Memos
Cooperative Insurance Auto Insurance
02/10/2023G)
Company
A lawsuit filed by a
21/03/1445H
plaintiff against Al-Sagr A Claim for Third-party
454617 (corresponding to 614 Exchange of Memos
Cooperative Insurance Auto Insurance
06/10/2023G)
Company
A lawsuit filed by a
21/03/1445H
plaintiff against Al-Sagr A Claim for Third-party
454720 (corresponding to 400 Exchange of Memos
Cooperative Insurance Auto Insurance
06/10/2023G)
Company
A lawsuit filed by a
12/03/1445H
plaintiff against Al-Sagr A Claim for Third-party
454818 (corresponding to 1,433 Exchange of Memos
Cooperative Insurance Auto Insurance
27/09/2023G)
Company
A lawsuit filed by a
12/03/1445H
plaintiff against Al-Sagr A Claim for all Risk Auto
454826 (corresponding to 900 Exchange of Memos
Cooperative Insurance Insurance
27/09/2023G)
Company
A lawsuit filed by a
16/03/1445H
plaintiff against Al-Sagr A Claim for all Risk Auto
454834 (corresponding to 300,000 Exchange of Memos
Cooperative Insurance Insurance
01/10/2023G)
Company
A lawsuit filed by a
30/03/1445H
plaintiff against Al-Sagr A Claim for all Risk Auto
454840 (corresponding to 14,670 Exchange of Memos
Cooperative Insurance Insurance
15/10/2023G)
Company
A lawsuit filed by a
20/03/1445H
plaintiff against Al-Sagr A Claim for all Risk Auto
454849 (corresponding to 2,417 Exchange of Memos
Cooperative Insurance Insurance
05/10/2023G)
Company
A lawsuit filed by a
25/03/1445H
plaintiff against Al-Sagr A Claim for all Risk Auto
454869 (corresponding to 25,566 Exchange of Memos
Cooperative Insurance Insurance
10/10/2023G)
Company
A lawsuit filed by a
21/03/1445H
plaintiff against Al-Sagr A Claim for all Risk Auto
454963 (corresponding to 11,266 Exchange of Memos
Cooperative Insurance Insurance
06/10/2023G)
Company

172
 Lawsuit Value
Lawsuit No. Parties to the Lawsuit Allegation Lawsuit Date Lawsuit Status
(SAR)

A lawsuit filed by a
17/03/1445H
plaintiff against Al-Sagr A Claim for all Risk Auto
455001 (corresponding to 15,723 Exchange of Memos
Cooperative Insurance Insurance
02/10/2023G)
Company
A lawsuit filed by a
04/04/1445H
plaintiff against Al-Sagr A Claim for Personal
455026 (corresponding to 500,000 Exchange of Memos
Cooperative Insurance Accidents Insurance
19/10/2023G)
Company
A lawsuit filed by a
27/03/1445H
plaintiff against Al-Sagr A Claim for Third-party
455102 (corresponding to 9,606 Exchange of Memos
Cooperative Insurance Auto Insurance
12/10/2023G)
Company
A lawsuit filed by a
01/04/1445H
plaintiff against Al-Sagr A Claim for Third-party
455159 (corresponding to 455,159 Exchange of Memos
Cooperative Insurance Auto Insurance
16/10/2023G)
Company
A lawsuit filed by a
27/03/1445H
plaintiff against Al-Sagr A Claim for all Risk Auto
455192 (corresponding to 10,138 Exchange of Memos
Cooperative Insurance Insurance
12/10/2023G)
Company
A lawsuit filed by a
08/04/1445H
plaintiff against Al-Sagr A Claim for Other
455224 (corresponding to 109,039 Exchange of Memos
Cooperative Insurance Insurances
23/10/2023G)
Company
A lawsuit filed by a
08/04/1445H
plaintiff against Al-Sagr A Claim for Third-party
455235 (corresponding to 17,059 Exchange of Memos
Cooperative Insurance Auto Insurance
23/10/2023G)
Company
A lawsuit filed by a
01/04/1445H
plaintiff against Al-Sagr A Claim for Third-party
455341 (corresponding to 8,095 Exchange of Memos
Cooperative Insurance Auto Insurance
16/10/2023G)
Company
A lawsuit filed by a
04/04/1445H
plaintiff against Al-Sagr A Claim for Personal
455382 (corresponding to 350,000 Exchange of Memos
Cooperative Insurance Accidents Insurance
19/10/2023G)
Company
A lawsuit filed by a
plaintiff against Al-Sagr A Claim for all Risk Auto
455660 - 20,000 Exchange of Memos
Cooperative Insurance Insurance
Company
A lawsuit filed by a
plaintiff against Al-Sagr A Claim for Third-party
455673 - 867 Exchange of Memos
Cooperative Insurance Auto Insurance
Company
A lawsuit filed by a
plaintiff against Al-Sagr A Claim for Third-party
455680 - 300,000 Exchange of Memos
Cooperative Insurance Auto Insurance
Company
A lawsuit submitted by a
plaintiff against Al-Sagr A Claim for Third-party
455697 - 1,140 Exchange of Memos
Cooperative Insurance Auto Insurance
Company
A lawsuit filed by a
plaintiff against Al-Sagr A Claim for Third-party
455778 - 5,591 Exchange of Memos
Cooperative Insurance Auto Insurance
Company
A lawsuit filed by a
plaintiff against Al-Sagr A Claim for all Risk Auto
455872 - 2,730 Exchange of Memos
Cooperative Insurance Insurance
Company
A lawsuit filed by a
plaintiff against Al-Sagr A Claim for Third-party
455895 - 4,955 Exchange of Memos
Cooperative Insurance Auto Insurance
Company

173
 Lawsuit Value
Lawsuit No. Parties to the Lawsuit Allegation Lawsuit Date Lawsuit Status
(SAR)

A lawsuit filed by a
plaintiff against Al-Sagr A Claim for Third-party
455933 - 788,000 Exchange of Memos
Cooperative Insurance Auto Insurance
Company
A lawsuit filed by a
plaintiff against Al-Sagr A Claim for Third-party
455972 - 3,600 Exchange of Memos
Cooperative Insurance Auto Insurance
Company
A lawsuit filed by a
plaintiff against Al-Sagr A Claim for all Risk Auto
455976 - 3,600 Exchange of Memos
Cooperative Insurance Insurance
Company
A lawsuit filed by a
plaintiff against Al-Sagr A Claim for Third-party
455999 - 3,500 Exchange of Memos
Cooperative Insurance Auto Insurance
Company
A lawsuit filed by a
plaintiff against Al-Sagr A Claim for Third-party
456032 - 24,020 Exchange of Memos
Cooperative Insurance Auto Insurance
Company
A lawsuit filed by a
plaintiff against Al-Sagr A Claim for Third-party
456036 - 90,000 Exchange of Memos
Cooperative Insurance Auto Insurance
Company
A lawsuit filed by a
plaintiff against Al-Sagr A Claim for Third-party
456064 - 14,526 Exchange of Memos
Cooperative Insurance Auto Insurance
Company
A lawsuit filed by a
plaintiff against Al-Sagr A Claim for Other
456177 - 29,000 Exchange of Memos
Cooperative Insurance Insurances
Company
A lawsuit filed by a
plaintiff against Al-Sagr A Claim for Third-party
456169 - 7,000 Exchange of Memos
Cooperative Insurance Auto Insurance
Company
A lawsuit filed by a
plaintiff against Al-Sagr A Claim for Third-party
456150 - 83,227 Exchange of Memos
Cooperative Insurance Auto Insurance
Company
A lawsuit submitted by a
plaintiff against Al-Sagr A Claim for Other
456104 - 423,662 Exchange of Memos
Cooperative Insurance Insurances
Company
A lawsuit filed by a
plaintiff against Al-Sagr A Claim for Third-party
456287 - 300,000 Exchange of Memos
Cooperative Insurance Auto Insurance
Company
A lawsuit filed by a
plaintiff against Al-Sagr A Claim for Third-party
456352 - 2,534 Exchange of Memos
Cooperative Insurance Auto Insurance
Company
A lawsuit filed by a
plaintiff against Al-Sagr A Claim for Third-party
456355 - 300,000 Exchange of Memos
Cooperative Insurance Auto Insurance
Company
A lawsuit filed by a
plaintiff against Al-Sagr A Claim for Third-party
456356 - 9,101 Exchange of Memos
Cooperative Insurance Auto Insurance
Company
A lawsuit filed by a
plaintiff against Al-Sagr A Claim for all Risk Auto
456471 - 33,506 Exchange of Memos
Cooperative Insurance Insurance
Company

174
 Lawsuit Value
Lawsuit No. Parties to the Lawsuit Allegation Lawsuit Date Lawsuit Status
(SAR)

Total 9,547,533

Labor Lawsuits

A lawsuit filed by a
plaintiff against Al-Sagr 10/03/1445H It was referred to the Labor Court,
Currently
14450310736 Cooperative Insurance Labor lawsuit (Corresponding to and no date has been set for the
unknown
Company (amicable 25/09/2023G) hearing.
settlement)
A lawsuit filed by a
plaintiff against Al-Sagr 09/19/1444H
Currently
14450320469 Cooperative Insurance Labor lawsuit (Corresponding to The lawsuit was dismissed.
unknown
Company (amicable 10/04/2023G)
settlement)

A lawsuit filed by a 30/03/1445H

Cs/2819741/ Currently No date has been set for the
plaintiff (amicable Labor lawsuit (Corresponding to
id314 unknown hearing.
settlement) 15/10/2023G)

Medical Claims

A lawsuit filed against

02/05/1444H
Al-Sagr Cooperative
443075 Medical claims (Corresponding to 25,000 Exchange of Memos
Insurance Company
26/11/2022G)
(medical insurance)
A lawsuit filed by a
plaintiff against Al-Sagr 27/09/1444H
The session was scheduled for
445775 Cooperative Insurance Medical claims (Corresponding to 3,176
10/04/1445H at 1 p.m.
Company (medical 18/04/2023G)
insurance)
A lawsuit filed by a
27/01/1444H The Appeal Committee decided
plaintiff against Al-Sagr
D 422481 Medical claims (Corresponding to 66,873 to refer it to the First Instance
Company in Al-Qassim
25/08/2022G) Committee.
(medical insurance)

Total 95,049 -

Arbitration Claim

A lawsuit filed by a
13/03/1445H
plaintiff Company against Arbitration regarding
- (corresponding to 7,756,620.68 Exchange of Memos
Al-Sagr Cooperative administrative fees
28/09/2023G)
Insurance Company
Source: The Company

9.10.2 Lawsuits and Disputes Filed by the Company as the Plaintiff

- As of the date of this Prospectus, the Company is a party to one lawsuit in its capacity as the plaintiff, with a total value of
(1,829,908.60) Saudi Riyals, as outlined in the below table:

Table No. (105): Lawsuits in Which the Company Has Taken the Status of the Defendant

No. Parties Date Amount (SAR) Status

A lawsuit filed by Al Sagr Cooperative 14/01/1445H

C450935 1,829,908.60 Under consideration
Insurance Company against a company. (corresponding to 08/01/2023G)
Source: The Company

175
9.11 Material Information that Changed since the CMA’s Approval on the Most Recent
Prospectus
The following is a summary of the most important information that has changed since the Authority’s approval of the most recent Prospectus,
which was issued on 08/10/1428H (corresponding to 20/10/2007G):

- Head Office: On 15/02/1430H (corresponding to 01/05/2016G), the Company announced moving its main headquarters
from the city of Riyadh to the city of Al Khobar.
- Election of Board of Directors (BOD) Members:
1. On 20/06/1432H (corresponding to 23/05/2011G), the OGA approved the election of the following gentlemen for the
second term of the Board: Abdulrahman bin Ali Alturki, Abdullah Juma Alsari, Amjad Yousry Aldweik, Sami Rouhi
Alshakhshir, Abdulrahman Hassan Alsharbatly, Abdulmohsen Abdullah Alsunaid, Mazen Ahmed Aljubeir, Bassam
Ahmed Albinali, Walid David Ayoub, and Tariq Abdullah Albassam. They were elected for a new term starting from the
OGA’s date, 20/06/1432H (corresponding to 23/05/2011G).
2. On 19/08/1435H (corresponding to 17/06/2014G), the OGA approved the election of the following gentlemen for the
third term of the Board: Abdulrahman Alturki, Abdullah Juma Alsari, Amjad Yousri Aldweik, Sami Rouhi Alshakhshir,
Abdulrahman Hassan Alsharbatly, Abdulmohsen Abdullah Alsunaid, Tariq Abdullah Albassam, Walid David Ayoub,
Bassam Ahmed Albinali and Mazen Ahmed Aljubeir. The New BOD’s term starts on 19/08/1435H (corresponding to
17/06/2014G) and ends on 21/09/1438H (corresponding to 16/06/2017G).
3. On 18/09/1438H (corresponding to 13/06/2017G), the OGA approved the election of the following gentlemen for the
fourth Board’s term: Fahd Abdulrahman Ali Alturki, Amajd Muhammad Yousry, Mahmoud Aldweik, Abdullah Juma
Majid Alsirri, Muhammad Sami Rouhi Hafez Alshakhshir, Salman Muhammad Hassan Abdullah Aljishi, Bassam
Ahmed Nasser Albinali, Tariq Abdullah Abdulaziz Albassam, Mahmoud Muhammad Nashar, and Saud Saleh Alarifi
for three years starting on 21/09/1438H (corresponding to 16/06/2017G) and ending on 24/10/1441H (corresponding to
16/06/2020G).
4. On 09/10/1441H (corresponding to 01/06/2020G), the OGA approved the election of the following gentlemen for the
fifth Board’s term: Abdulmohsen Jaber, Majed Abdullah Alsirri, Sultan bin Abdulaziz Alsuwaidi, Abdullah Juma Majed
Alsari, Fahd Abdulrahman Alturki, Abdullah bin Abdul Rahman Albassam, Yasser bin Abdulaziz Alqadi, Khaled bin
Abdul Hamid Alshuwaier, Sultan Khaled Alturki, for three years starting on 24/10/1441H (corresponding to 16/06/2020G)
and ending on 26/11/1444 H (corresponding to 15/06/2023G).
5. On 08/05/1445H (corresponding to 22/11/2023G), the OGA approved the election of the following gentlemen for
the sixth Board’s term: Abdul Mohsen Nafez Jaber, Sultan bin Abdul Aziz Alsuwaidi, Abdullah Suleiman Alhindi,
Muhammad Abdulaziz Alnaeem, Sami Ahmed Albabtin, Nayef Rashid Alarfaj, Yasser Mohammed Alharbi, Saud Saleh
Alarifi, Ahmed Khader Albaqshi for three years starting on 09/05/1445H (corresponding to 23/11/2023G) and ending on
12/06/1448H (corresponding to 22/11/2026G).

- Capital and Bylaws:

1. On 26/06/1434H (corresponding to 06/05/2013G), the EGA approved the Board of Directors’ recommendation to
increase the Company’s capital from two hundred million (200,000,000) Saudi Riyals to two hundred and fifty million
(250,000,000) Saudi Riyals by a percentage (25%) by granting a free share for every (4) outstanding shares owned by
Shareholders registered in the Shareholder Register at the end of Trading on the day of the EGA, provided that the value
of the capital increase is paid by transferring an amount of fifty million (50,000,000) Saudi Riyals from retained profits,
and thus the number of shares will increase from twenty million (20,000,000) shares to twenty-five (25,000,000) shares,
by five million (5,000,000) shares, and the text of Article (7) of the Company’s By-laws will be amended as follows: The
Company’s capital amounting to two hundred and fifty million (250,000,000) Saudi Riyals will be divided into twenty-
five million (25,000,000) shares with a nominal value of (10) Saudi Riyals per share.
2. On 20/08/1438H (corresponding to 16/05/2017G), the EGA approved the amendment of the Company’s Bylaws in
accordance with the Companies Law.
3. On 16/11/1439H (corresponding to 29/07/2018G), the EGA approved the Board of Directors’ recommendation regarding
the capital increase, by granting bonus shares to the Company’s Shareholders as follows: The capital before the increase
was equal to two hundred and fifty million (250,000,000) Saudi Riyals, and after the increase will amount to four
hundred million (400,000,000) Saudi Riyals, with an increase percentage of (60%), and the number of shares before the
increase was twenty-five million (25,000,000) shares, while after the increase will become forty million (40,000,000)
shares, by granting (3) shares for every (5) shares.
4. On 17/03/1444H (corresponding to 13/10/2022G), the EGA approved a capital reduction from four hundred million
(400,000,000) Saudi Riyals to one hundred and forty million (140,000,000) Saudi Riyals divided into fourteen million
(14,000,000) ordinary shares in order to amortize all accumulated losses accounting for two hundred and sixty million
(260,000,000) Saudi Riyals by cancelling twenty-six million (26,000,000) shares of the Company’s issued shares. The
reduction percentage amounted to (65%) of the Company’s capital.
5. On 28/02/1445H (corresponding to 13/09/2023G), the Company’s Board of Directors recommended increasing the
capital by offering Rights Issue worth one hundred and sixty million (160,000,000) Saudi Riyals, so that the capital after
the increase would become three hundred million (300,000,000) Saudi Riyals in compliance with the minimum required
capital of insurance companies.

176
 - Corporate Governance: The approval of internal regulations and policies related to Company’s Corporate Governance
in line with the provisions of the Corporate Governance Regulations for Listed Companies issued by the CMA and the
Corporate Governance Regulations for Insurance Companies.

9.12 Declarations Related to Legal Information

In addition to the other declarations referred to in this Prospectus, the members of the BoD declare the following:

1. The issuance does not constitute a breach of the relevant laws and regulations in Saudi Arabia.
2. The issuance does not constitute a breach of any contract or agreement entered into by the Company.
3. All material legal issues concerning the Company have been disclosed in this Prospectus
4. Other than what has been mentioned in paragraph (9.10) “Disputes and Litigations” on page (166) of this Prospectus, the
Company is not subject to any lawsuits or legal proceedings that could individually or collectively have a material effect on
the affect its business or financial position.
5. Members of the Company’s Board of Directors are not subject to any lawsuits or legal proceedings that could individually or
collectively have a material effect on the Company's affect the Company’s business or financial position.

177
10. Underwriting

The Company and the Underwriter, have entered into an Underwriting Agreement to cover the subscription of sixteen million (16,000,000)
ordinary shares, at a price of then (10) Saudi Riyals per share, with a total value of one hundred and sixty million (160,000,000) Saudi Riyals,
representing the entire amount or (100%) of the Rights Shares being offered for subscription (“Underwriting Agreement”).

10.1 Underwriter

Al Bilad Capital
Riyadh - Olaya district
King Fahd Road - P.O. Box 140, Riyadh 11411
Kingdom of Saudi Arabia
Phone Number: +966 (11) 920003636
Fax: +966 (11) 2906299
Website: www.albilad-capital.com
E-mail: [email protected]

10.2 Summary of Underwriting Arrangement

In accordance with the terms and conditions of the Underwriting Agreement:

- The Company undertakes to the Underwriter that, on the allocation date, it will allocate and issue to the Underwriter all
Rights Shares that have not been subscribed for by Eligible Shareholders as additional shares at the Offer Price.
- The underwriter undertakes to the Company that, on the allocation date, it will purchase the Rights Issue Shares not subscribed
for by Eligible Persons, as additional shares at the Offer Price.
- The Underwriter shall, on account of underwriting, receive a specified amount of money to be paid from the Offer Proceeds.
- The commitment of the Underwriter to subscribe to Rump Shares is subject to the termination provisions as stipulated in
the agreement such as the occurrence of a force majeure event as defined in the agreement and satisfaction of the precedent
conditions in line with the agreement.
- The Company shall provide specific warranties, covenants and undertakings to the Underwriter.

178
11. Waivers

The Company has not submitted a waiver request to the CMA in relation to this Offering.

179
12. Information Related to Shares and Terms and Conditions of the
Offering

The Company has filed an application to the CMA for the registration and offering of the New Shares, and to the Saudi Stock Exchange
(Tadawul) for listing the New Shares. All requirements have been fulfilled in accordance with the Rules on the Offer of Securities and
Continuing Obligations and the Listing Rules.

All Eligible Persons (the Registered Shareholders and holders of acquired Rights) and Institutional Investors applicants shall read the
subscription terms and conditions carefully before electronic subscription, submission of the subscription application through a Broker, or
filling out the Rump Offering application form. The submission of the Subscription Application or the signing and delivery of the Rump
Offering Subscription application form constitutes acceptance of the mentioned terms and conditions.

12.1 The Offering

Pursuant to this Prospectus, sixteen million (16,000,000) new ordinary shares will be offered - by issuing rights shares - at an Offer Price of ten
(10) Saudi Riyals per share, with a nominal value of ten (10) Saudi Riyals per share, and with a total offering value of one hundred and sixty
million (160,000,000) Saudi Riyals, representing approximately (114.29%) of the Company’s capital before the capital increase. New shares
will be issued to all holder of Rights at a ratio of (1.1429) new shares for every one (1) current share, and subscription to the new shares is
entitled to rights for all owners of trading rights, in order to increase the company’s capital from one hundred and forty million (140,000,000)
Saudi Riyals to three hundred million (300,000,000) Saudi Riyals.

12.2 How to Apply for Subscription to Rights (New Shares)

Eligible shareholders wishing to subscribe to the Rights Issue shall submit the Subscription Applications during the Subscription Period
through the investment portfolio on trading platforms through which purchase and sale orders are entered, in addition to subscribing through
other channels available at the broker and shares Custodian. The data of the Eligible Person must be updated, and no changes have occurred
in the data or information of the Eligible Person since the subscription to a recent offering, unless these amendments have been communicated
and approved by the broker. If there is a Rump Offering Period, Subscription Application Forms can also be submitted during such period by
Institutional Investors for any Rump Shares only.

By subscribing, the subscriber:

- Agrees to subscribe to the Company’s shares in the number of such shares specified in the Subscription Application Form.
- Declares that he/she has read the Prospectus and understood all of its content.
- Accepts the Company’s Bylaws and the terms mentioned in the Prospectus.
- Declares no applying for subscription to the same shares for this offering through broker, and the Company has the right to
reject all applications in the event of a repeat subscription request.
- Accepts the number of shares allocated thereto and all other subscription instructions and terms mentioned in the Subscription
Application Form and in this Prospectus;
- Warrants not to cancel or amend the Subscription Application Form after submitting it to the Broker.
Registered Shareholders will be able to trade the Rights deposited in their portfolios via Tadawul. These Rights are considered an acquired right
for all Shareholders registered in the Company’s Shareholder Register at the Depository Center at the end of the second Trading Day following
the day of the EGA for the capital increase (“the Eligibility Date”). Each Right gives its holder the right to subscribe for one new share, at the
Offer Price. Rights Issue Shares will be deposited no more than two business days after the EGA meeting for the capital increase is held. The
Rights will appear in the Registered Shareholders’ portfolios under a new symbol for Rights Issue, and the Registered Shareholders will then
be notified of the deposit of the Rights in their portfolios.

12.3 Subscription and Application Form

Eligible Persons wishing to exercise their full right and subscribe for all the New Shares to which they are entitled must fill and submit a
completed Subscription Application Form through the investment portfolio in the trading platforms used to insert purchase and sale orders in
addition to subscribing through other channels available at the broker and shares Custodian.

180
The data of the eligible person must be updated, and no changes have occurred in the data or information of the eligible person since he
subscribed to a recent offering, unless these amendments have been communicated to the broker and approved by him.

The number of Shares to which the Eligible Person is entitled to subscribe will be calculated based upon the number of Rights held by him.
As for the subscription monies that the subscriber must pay for the New Shares will be calculated by multiplying the number of Rights owned
prior to closing of the Subscription Period by SAR (10).

12.4 Trading Period, Offering Period, and Rump Offering Period

Eligible Shareholders wishing to subscribe to the Rights shall submit the Subscription Application during the Subscription Period, which
begins in three (3) working days after the approval of the Extraordinary General Assembly including the approval of the capital increase,
Tuesday 26/12/1445H (corresponding to 02/07/2024G) and ends on Sunday 08/01/1446H (corresponding to 14/07/2024G) during the period
from ten o’clock (10:00) in the morning until two o’clock (2:00) in the evening. Eligible shareholders who wish to trade in rights issue shares
must submit a trading request during the trading period, which begins on Tuesday 26/12/1445H (corresponding to 02/07/2024G) and ends
Tuesday 03/01/1446H (corresponding to 09/07/2024G) during the period from ten o’clock (10:00) in the morning until three o’clock (3:00) in
the evening.

The EGA held on Wednesday 20/12/1445H (corresponding to 26/06/2024G) approved the recommendation of the Board to increase the
Company share capital through Rights Issue. Under this Prospectus sixteen million (16,000,000) Ordinary Shares (“Rights Shares” or “New
Shares) will be offered at a nominal value of SAR 10/share, and at an Offer Price of ten (10) Saudi Riyals per share with a total value of
one hundred and sixty million (160,000,000) Saudi Riyals. Hence, the Company’s capital will increase from one hundred and forty million
(140,000,000) Saudi Riyals to three hundred million (300,000,000) Saudi Riyals, divided into thirty million (30,000,000) Ordinary Shares at
an increased rate representing (114.29%) of the Company’s current capital.

Pursuant to this Prospectus, sixteen million (16,000,000) Ordinary Shares will be offered for subscription through Rights Issue Shares, which
represent approximately (114.29%) of the Company’s capital before the subscription, at an Offer Price of ten (10) Saudi Riyals per share,
a nominal value of ten (10) Saudi Riyals per share, and a total offering value of one hundred and sixty million (160,000,000) Saudi Riyals.
The New Shares will be issued at a rate one share per Rights Issue. Subscription Rights will be offered to Shareholders registered in the
Company’s Shareholder Register at the end of the second trading day following the EGA, which includes the approval of capital increase
from one hundred and forty million (140,000,000) Saudi Riyals to three hundred million (300,000,000) Saudi Riyals by Issuing Rights on
Wednesday 20/12/1445H (corresponding to 26/06/2024G), and to Eligible Persons who purchased the Rights during the Trading Period,
including Registered Shareholders who purchased additional Rights in addition to the Rights they already own.

In the event that the Eligible Persons do not exercise their right to subscribe to the New Shares at the end of the Offering Period, the Rump
Shares, in additional to Fractional Shares (if any) will be offered to the Institutional Investors during the Rump Offering Period.

The Registered Shareholders may trade in the Rights deposited in their portfolios through the Tadawul system. Such Rights are deemed a right
entitled to all Shareholders registered in the Company Register as of the close on the second Trading Day following the EGA Meeting. Each
Right grants its holder eligibility to subscribe to one New Share at the Offer Price. The Rights will be deposited after the EGA. The Shares will
appear in the portfolios of Registered Shareholders under a new symbol that designates Rights Issue Shares.

Rights shares will be offered according to the phases and dates set out below:

- Eligibility Date: Close of trading on the day of the EGA Meeting dated Wednesday 20/12/1445H (corresponding to
26/06/2024G).
- Trading Period and Offering Period: The Trading Period and Offering Period start in three (3) working days after the
approval of the Extraordinary General Assembly including approval of the capital increase in Tuesday 26/12/1445H
(corresponding to 02/07/2024G), and the Trading Period will end on Tuesday 03/01/1446H (corresponding to 09/07/2024G),
while the Offering Period will continue until the end of Sunday 08/01/1446H (corresponding to 14/07/2024G). It should
be noted that trading hours for Rights Issue start from ten (10:00) in the morning until three (3:00) in the evening, while
subscription hours for Rights Issue start from ten (10:00) in the morning until two (2:00) hours. 00) PM.
- Rump Offering Period: The period will start at 10:00 am on Wednesday 11/01/1446H (corresponding to 17/07/2024G) until
the following day at 5:00 pm on Thursday 12/01/1446H (corresponding to 18/07/2024G). During this period, Rump Shares
will be offered to several institutional investors (referred to as “Investment Institutions”). These investment institutions
shall make offers to buy the Rump Shares during the Rump Offering Period. The Rump Shares will be allocated to the
Investment Institutions in order of priority based on the price per Share offered (provided that it is not less than the Offer
Price) with shares being allocated on a proportional bases among those Institutional Investors that tendered offers at the same
price. Fractional Shares will be added to the Rump Shares and treated in the same manner. In the event that the price of the
unsubscribed shares is higher than the offer price, the difference (if any) shall be distributed as compensation to holders of
priority rights who did not subscribe for their rights in proportion to the rights they own.
- Final Allocation of Shares: Shares will be allocated to each investor based on the number of Rights properly and fully
exercised thereby. As for Shareholders entitled to fractional Shares, these shall be accumulated and offered to Institutional
Investors during the Rump Offering. The total remaining Offer Price will be paid to the Company, and the remaining proceeds
from the sale of the Rump Shares and fractional shares (above the Offer Price) shall be paid to the Eligible Persons, each
according to what he deserves, no later than Tuesday 17/01/1446H (corresponding 23/07/2024G).
- Trading of New Shares on the Exchange: Trading in the New Shares will start on Tadawul upon the completion of all
procedures relating to the registration, allocation and listing of the New Shares. The period between the end of subscription
for New Shares and the deposit of shares in the Shareholders’ portfolios will be (9) working days.

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12.5 Eligible Persons not participating in the Subscription of the New Shares
Shareholders who do not participate fully or partially in the Subscription of New Shares will be subject to a decrease in their shareholding
percentage in the Company, in addition to a decrease in the value of their current shares. Registered Shareholders who have not exercised their
subscription right will retain the same number of the shares they owned before the capital increase.

Eligible Persons who neither subscribe nor sell their rights, are subject to loss. Eligible Persons who do not participate in the New Shares will
not receive any benefits or rewards in return for the Rights Shares due to them other than cash compensation from the proceeds of the Rump
Offering shares, each according to his due amount (if any). The Registered Shareholders will retain the same number of shares they held before
the capital increase. If the Institutional Investors wish to buy the Rump Shares at the Offer Price only, or if they do not wish to subscribe to
shares, and therefore the Underwriter buys the Rump Shares at the Offer Price, the Eligible Persons who did not participate in the Subscription
will not receive any compensation due to not exercising their Rights in the New Shares.

If Rump Shares are sold to Institutional Investors at a price higher than the Offer Price, the compensation amount will be determined for
Eligible Persons who did not participate in subscribing to the New Shares, in whole or in part, according to the following equation:

Total Proceeds of Rump Offering - Total Price of Rump Offering

Amount of the compensation for each remaining share =
Number of Unsubscribed Shares

12.6 Allocation Refund

The Company and the Lead Manager will open an escrow account in which the proceeds of the Offering will be deposited. The Rights shall
be allocated to Eligible Persons based on the number of Rights properly and fully exercised by it. As for the fractional Shares, these shall be
accumulated and offered to Institutional Investors during the Rump Offering. The total remaining Offer Price will be paid to the Company, and
the remaining proceeds from the sale of the Rump Shares and fractional shares (above the Offer Price, if any) shall be paid to Eligible Persons,
at the Offer Price of ten (10) Saudi Riyals per share, whichever is due by the date of Monday 15/02/1446H (corresponding to 19/08/2024G).
Excess unsubscribed Shares shall purchase by and allocated to the Underwriter at the launch price.

Final notice for the number of Shares allocated to each Eligible Person is expected to take place by depositing the shares into the accounts of
Subscribers without any charges or withholdings by the Lead Manager. Eligible Persons shall contact the branch of the Broker where they have
submitted the Subscription Application Form to obtain any further information. The announcement regarding the allocation shall be made no
later than Tuesday 17/01/1446H (corresponding 23/07/2024G).

12.7 Payment of Compensation and Refund

The Cash compensation amounts which represents the remaining proceeds from the offering operations in excess of the Offer Price (the
remaining proceeds of the Offer Proceeds beyond the Offer Price) will be paid by the issuer to the Eligible Persons who did not subscribe wholly
or partially to the Rights (if any) without any commissions or deductions no later than one day, dated Monday 15/02/1446H (corresponding to
19/08/2024G). The amounts will be deposited in the bank accounts linked to the portfolios of Eligible Persons who have not exercised their
right to subscribe to the New Shares and those entitled to fractional shares.

12.8 Supplementary Prospectus

In accordance with the requirements of Article (49) of the Rules on the Offer of Securities and Continuing Obligations, the Company must
submit a supplementary prospectus to the Authority if it becomes aware at any time after the publication date of the prospectus and before the
completion of the offering that:

- there is a significant change in fundamental matters in this prospectus; or

- the occurrence of important matters that should have been included in this prospectus.
The investor who subscribed for the New Shares prior to the publication of the supplementary Prospectus may cancel or amend his/her
subscription for these shares before the end of the Offering Period.

12.9 Suspension or Cancellation of the Offering

The CMA may at any time issue a decision to suspend the offering if it deems that the offering may result in a breach of the capital market
law, its implementing regulations, or the market rules. In addition, the offer will be canceled if the EGA does not approve any of the details of
the offer.

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12.10 Restrictions on trading in Rights
With the exception of regulatory restrictions imposed on publicly listed shares, there are no restrictions imposed on trading the Rights.

12.11 Questions and Answers on Rights Issue

What is a Rights Issue?

Rights Issue are tradable securities that give their holder the right to subscribe for the New Shares offered, upon approval of the EGA on the
capital increase by issuing new shares. All shareholders registered in the Company’s shareholders register at the Depository Center at the end
of the second trading day following the date the EGA’s meeting approving the capital increase will be entitled to receive said Rights. Each right
grants its holder the eligibility to subscribe for one new share at the Offer Price.

Who is granted the Rights Issue?

All registered shareholders in the Company’s shareholders register at the Depository Center at the end of the second trading day following the
EGA’s meeting approving the capital increase.

When are the Rights Issue deposited?

After the EGA approval on the capital increase through the offering of Right Issue Shares, the Rights Issue are deposited as securities in the
shareholders’ portfolios in the Company’s shareholders’ register at the Depository Center at the end of the second trading day after the EGA’s
meeting; and the Rights Issue will be listed in the shareholders’ portfolios under a new symbol. These rights will only be traded or subscribed
for at the beginning of the Trading and Subscription Periods.

How are investors notified of the Rights being deposited in their portfolios?
The notification is made through announcement on the Tadawul website, as well as through the (Tadawulaty) service provided by the Securities
Depository Center Company (Edaa), and short text messages (SMS) are also sent through brokers.

How many Rights Issue can be acquired by a Registered Shareholder?

The number is subject to the Rights Issue ratio and the number of the current Shares held by the Shareholder in the capital as well as in the
Company Shareholders’ Register at the Securities Depository Center Company (Edaa) at the end of the second trading day following the
Extraordinary General Assembly’s meeting approving the capital increase.

What is the Subscription Eligibility Ratio?

It is the ratio that enables the Registered Shareholder to know how many Rights he/she is entitled to in relation to the current shares that he/
she already owns at the end of the second trading day following the EGA’s meeting approving the capital increase. This factor is calculated by
dividing the number of new shares by the number of the current shares of the Company, and accordingly, the eligibility ratio is (1.1429) Rights
approximately for every (1) share owned by the Registered Shareholder on the eligibility date. Thus, if a Registered Shareholder owns (1,000)
shares on the eligibility date, then he/she will be allocated (1,142) Rights in exchange for the shares he/she owns.

Will the name and symbol of trading these rights differ from the name and symbol of the Company’s shares?
Yes, the acquired rights will be deposited in the investors’ portfolios under the original name, adding the Rights Issue term as well as a new
symbol for these rights.

What is the value of the Rights at the beginning of trading?

The opening price of the Right is the difference between the closing price of the share on the day preceding the Rights listing and the Offer Price
(the indicative value of the Right). For example, if the closing price of a share on the previous day is fifteen (15) Saudi Riyals and the Offer
Price is ten (10) Saudi Riyals, the opening price of the Rights upon the commencement of trading will be five (5) Saudi Riyals.

Who is a Registered Shareholder?

Any shareholder owning shares at the end of the trading day of the EGA’s meeting approving the capital increase and registered in the
Company’s Shareholders Register at the Depository Center at the end of the second trading day following the EGA’s meeting held to approve
the capital increase.

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Can registered shareholders subscribe to additional shares?
Yes, Registered Shareholders can subscribe to additional shares by purchasing new Rights during the Trading Period and then subscribe to them
during the Subscription Period after completing the purchase and settlement of Rights.

Is it possible for a shareholder to lose his/her eligibility to subscribe even if he/she has the right to attend the
Extraordinary General Assembly’s meeting and vote on increasing the capital through a Rights Issue?
Yes, the Shareholder loses his/her eligibility to subscribe if he/she sells his/her shares on the day of the EGA’s meeting approving the capital
increase or one business day prior to said meeting.

How is the Subscription process implemented?

The subscription process is implemented, as is currently being done, through submitting subscription applications during the Subscription
Period through the investment portfolio on the trading platforms through which the purchase and sell orders are filed. In addition to the
possibility of subscription through any other means provided by the broker and the custodian of shares.

What are the Trading and Subscription periods?

Trading and Subscription of rights begin at the same time after (3) three business days from the approval of the EGA on the Capital Increase,
until the end of trading of the sixth day while the subscription continues until the ninth day, according to what is mentioned in this prospectus
and the Company’s announcements.

Can an Eligible Person subscribe to more shares than the Rights owned by him/her?
An Eligible Person cannot subscribe to more shares than the Rights owned by him/her.

Is it possible to Subscribe more than once and through more than one broker?
Yes, it is possible and the number of New Shares that can be subscribed through each broker will depend on the number of Rights available
in the investment portfolio of the relevant broker. In all cases, it must be taken into consideration that the quantity of new subscribed shares
does not exceed the number of Rights Issue owned at the end of the Rights Issue’s trading period, as such will result in cancellation of the
subscription application.

If the Company shares are acquired through more than one investment portfolio, in which portfolio will the Rights
Issue be deposited?
Rights Issue will be deposited in the same portfolio where the company’s rights-related shares are deposited. For example, if a shareholder
holds one thousand (1,000) shares in the Company: eight hundred (800) shares in portfolio (A) and two hundred (200) shares in portfolio (B),
then the total rights amounting to one thousand one hundred forty-two (1,142) Rights, as each share is eligible for (1.1429) Rights. Therefore,
nine hundred fourteen (914) rights will be deposited in portfolio (A) and two hundred twenty-eight (228) Rights will be deposited in portfolio
(B).

Are share certificate holders allowed to subscribe and trade?

Yes, holders of share certificates are allowed to subscribe. However, they will not be able to trade unless share certificates are deposited in
investment portfolios through the brokers or Depository Center of the Saudi Exchange (Edaa) and submitting the required documents, before
the end of Subscription Period.

What happens if New Shares are subscribed and Rights are subsequently sold?
If a Registered Shareholder subscribed for New Shares and then sells the Rights without purchasing a number of Rights equal to the number of
exercised Rights, he/she subscribed in before the end of the Trading Period, then the subscription application will be rejected entirely, if all the
rights have been sold, or partially in an amount equal to the number of sold rights. The Registered Shareholder will be notified and refunded
the rejected subscription amount by the broker.

Are additional Rights purchasers entitled to trade them once again?

Yes, purchaser of additional Rights may sell them and purchase other Rights during the Trading Period, only.

Is it possible to sell a part of the Rights Issue?

Yes, the Investor can sell a part of these Rights and subscribe for the remaining part.

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When can a shareholder subscribe for the Rights Issue, he/she purchased during the Trading Period?
After settlement of the purchase of Rights (which is two business days), provided that the subscription for Rights Issue is completed during
the Subscription Period.

Can the Eligible Person sell or assign the Rights Issue after the end of the Trading Period?
No, it is not possible. After the expiry of the Trading Period, the Eligible Person may only exercise the right to subscribe for the Rights Issue
Shares or not. In case the Right is not exercised, the investor may be subject to loss or decrease in the value of his investment portfolio.

What happens to Rights Issue that are unsold or unsubscribed for during the Trading and Subscription Periods?
If the New Shares are not fully subscribed for during the Subscription Period, the remaining New Shares will be offered for subscription
through an offering to be organized by the Lead Manager. The amount of compensation (if any) to the Rights holder will be calculated after
deducting the subscription value. The investor may not receive any compensation if the sale occurs during the Rump Offering Period at the
Offer Price.

Who has the right to attend the Extraordinary General Assembly and vote on increasing the Company’s capital
through offering Rights issue shares?
A shareholder registered in the Company’s shareholders’ register at the Depository Center at the end of the trading session, on the date of the
EGA’s meeting, has the right to attend the EGA’s meeting and vote on increasing the Issuer’s share capital through a Rights Issue.

When is the share price adjusted as a result of increasing the Issuer’s share capital through a Rights Issue?
The share price is adjusted by Tadawul before the start of trading on the day and following the EGA’s meeting.

If an investor buys securities on the date of the EGA, will he/she be eligible for the Rights resulting from the
increase of the Issuer’s share capital?
Yes, as the investor will be registered in the Company Shareholders Register two business days after the date of the purchase of shares (i.e.,
at the end of the second Trading Day following the day of the EGA), bearing in mind that Rights Issue will be granted to all shareholders
registered in the Company Shareholders Register at the end of trading session on the second trading day following the date of the EGA.
However, he/she may not attend or vote in the EGA for the capital increase.

If an investor has more than one portfolio with more than one brokerage company, how will their Rights be
calculated?
The investor’s shares will be distributed to their portfolios according to the percentage of ownership in each portfolio. In the event of fractional
share, these fractions will be aggregated. If the outcome is an integer or more, the integer number will be added to the portfolio in which the
investor has the largest number of Rights.

Will any other fees be added for Rights Trade?

The same commissions will be applied to selling and buying transactions as they are in shares, but without a minimum commission amount,
provided that the maximum amount does not exceed fifteen and a half basis point (0.155%) of the total transaction value.

Is it possible to subscribe during the weekend?

No, it is not possible.

Can public investors other than registered shareholders subscribe for Rights Issue shares?
Yes, after completing the purchase of Rights Issue through the market during the Trading Period.

12.12 Trading of New Shares

Trading of the New Shares will begin when all relevant procedures are completed. This is expected to be after the allocation of the New Shares,
and the start of trading will be announced at a later date.

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12.13 Decisions and Approvals Pursuant to Which the New Shares Will Be Offered
The decisions and approvals pursuant to which the New Shares will be offered are as follows:

The Board of Directors’ recommendation dated 28/02/1445H (corresponding to 13/09/2023G) to increase the Company’s capital through
offering New Shares worth one hundred and sixty million (160,000,000) Saudi Riyals.

The Insurance Authority non-objection on the capital increase pursuant to letter No. (134-23) dated 26/05/1445H (corresponding to
12/10/2023G).

The Saudi Tadawul Group’s approval of the request to list Rights Shares on Sunday 23/07/1445H (corresponding to 04/02/2024G).

The CMA’s approval of the Prospectus and all supporting documents it requested on the date of its approval on 15/10/1445H (corresponding
to 24/04/2024G).

The approval of the EGA of the Company’s Shareholders held on Wednesday 20/12/1445H (corresponding to 26/06/2024G) to increase the
Company’s capital through the Rights Issue Shares. The subscription consists of offering sixteen million (16,000,000) Ordinary Shares at an
Offer Price of ten (10) Saudi Riyals per share, with a nominal value of ten (10) Saudi Riyals per share, and an offering value of one hundred and
sixty million (160,000,000) Saudi Riyals, in order to increase the Company’s capital from one hundred and forty million (140,000,000) Saudi
Riyals to three hundred million (300,000,000) Saudi Riyals, and to increase the number of shares from fourteen million (14,000,000) Ordinary
Shares to thirty million (30,000,000) ) Ordinary Shares.

12.14 Miscellaneous Items

- Subscription Application and all related terms, conditions and undertakings are binding and for the benefit of the applicants,
their successors, assignees, will executors, estate managers and heirs, provided that, except for what is specifically stipulated
in this Prospectus, the application or any rights, interests or obligations arising out of it shall not be waived or delegated to
any of the parties referred to in this Prospectus without obtaining the prior written consent of the other party.
- These instructions, the conditions and any receipt of the Subscription Application or related contracts shall be governed,
construed, interpreted and enforced in accordance with the laws of the Kingdom of Saudi Arabia.
- This Prospectus can be distributed in both Arabic and English. In the event of a difference between the two versions, the
Arabic prevails.
- The Capital Market Authority may at any time issue a decision to suspend this offering if it deems that the offering could
result in a violation of the Capital Market Law, its implementing regulations, or market rules. It is also possible that the
offering may be canceled in the event that the Extraordinary General Assembly does not approve any of the details of the
offering.
- According to Article (49) of the Rules on the Offer of Securities and Continuing Obligations, the Company must submit a
supplementary prospectus to the Authority if it becomes aware at any time after the publication date of the prospectus and
before the completion of the offering that: (1) there is a significant change in fundamental matters in this prospectus; or (2)
the occurrence of important matters that should have been included in this prospectus. In these cases, the Company is required
to submit to the Authority a supplementary prospectus in accordance with the requirements of the rules for offering securities
and continuing obligations, and then the supplementary prospectus will be issued and the new subscription dates announced.
It is also possible to suspend this subscription if the Extraordinary General Assembly does not approve any of its details.
Additional Information: If you have any inquiries, please contact the Company via email [email protected]. For legal reasons, the
Company will only be able to provide the information contained in this Prospectus and will not be able to advise on the merits of the Rights
Issue or provide financial, tax, legal or investment advice.

12.15 Statement of Any Existing Arrangements to Prevent Disposal of Certain Shares

There are no arrangements in place to prevent disposal of any shares.

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13. Change in the Share Price as a Result of Capital Increase

13.1 Change in the Share Price as a Result of the Capital Increase

The closing price of the Company’s share on the day of the EGA is SAR 27.70, and is expected to reach SAR 18.26 at the opening day of
the following day; this change represents a decrease of (34.08%). In the event that any of the Shareholders registered in the Company’s
Shareholders Reg-ister at the Securities Depository Center (Edaa) fails to subscribe at the end of the second trading day following the date of
the Extraordinary General Assembly approving the Capital Increase, this will lead to a decrease in their ownership percentage in the Company.

13.2 The Method of Calculating the Share Price as a result of the Capital Increase
First: Calculation of the closing market value of the Company on the day of the EGA approving the Capital Increase:

The number of shares at the end of the EGA Day X The closing price of the Company’s share on the day of the EGA = the market value of the
Company at the close on the day of the EGA.

Second: Calculating the share price at the opening day of the day that follows the day of the EGA

(The market value of the Company at closing the day of the EGA + the value of the shares offered) / (the number of shares at the end of the day
of the EGA + the number of shares offered for subscription) = the share price expected in the opening day following the day of EGA.

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14. Subscription Declarations

14.1 Overview of the Subscription Applications and Undertakings

Subscription can be made using trading platforms or any other means provided by the broker to investors. Subscription to the New Shares will
be available during the Subscription Period in one phase as follows:

- During such period, all Registered Shareholders and New Investors are entitled to subscribe to the New Shares.
- The Registered Shareholder may during the Subscription Period directly subscribe for the New Shares prorated to its own
shares. In case the Registered Shareholder purchases new rights, he or she will be allowed to subscribe for them after the end
of the settlement period (two business days).
- The New Investors are entitled to subscribe to the New Shares after the end of the settlement period (two business days).
- Subscription will be available electronically through the investment portfolio on the trading platforms and applications
through which sale and purchase orders are entered, in addition to subscription through other channels and means available
to the agent.
Each Right entitles its holder the right to subscribe to one New Share, at the Offer Price. Subscribers to New Shares shall acknowledge the
following:

- Acceptance of all the terms and conditions stated in this Prospectus.

- They have carefully read this Prospectus and understood its contents.
- Acceptance of the Company’s Bylaws.
- Undertaking not to cancel or modify the subscription application after its admission.

14.2 Allocation Processes

The Rights Shares shall be allocated to the Eligible Persons based upon the number of Rights that they properly exercised. As for those entitled
to Fractional Shares (if any), the fractions will be collected and offered to the Institutional Investors during the Rump Offering Period. The total
Offer Price of Rump Shares will be paid to the Company, and the remaining proceeds resulting from the sale of the Rump Shares and Fractional
Shares (i.e., in excess of the Offer Price, if any) shall be distributed to the Eligible Persons, each according to his/her dues, no later than Monday
15/02/1446H (corresponding to 19/08/2024G). Excess Unsubscribed Shares shall be purchased under the offer price by and allocated to the
Underwriter. There will be no compensation for investors who did not subscribe or did not sell their Rights, and holders of Fractional Shares
during the Rump Offer Period.

Eligible Persons shall contact the broker through which they have submitted their Subscription Applications Form to obtain additional
information. Notification of the final allocation results will be made no later than Tuesday 17/01/1446H (corresponding 23/07/2024G).

14.3 Saudi Tadawul Group (Tadawul)

On 08/25/1442H (corresponding to 04/07/2021G), the Saudi Stock Exchange Company announced its conversion into a holding Company
under the name of the Saudi Tadawul Group, with a new structure that supports the development of the Saudi capital market’s future and
ensures its continued development, and as another step towards the Group’s readiness for the initial public offering within the year 2021G.
The Saudi Tadawul Group includes four (4) subsidiaries: the Saudi Tadawul as a securities market, the Securities Clearing Center Company
(Muqasa), the Securities Depository Center Company (Edaa), and the Wamid Company, which specializes in technical services and solutions
based on innovation. Therefore, the Group benefits from the integration of the services of its subsidiaries and joint businesses, knowing that the
independence of subsidiaries will provide a work environment characterized by flexibility and innovation to keep pace with rapid developments
in global markets.

As for the Tadawul system, it was established in 2001G as an alternative system to the electronic securities information system, and electronic
stock trading began in the Kingdom in 1990.

The trading process takes place through an integrated electronic system, starting with the execution of the deal and ending with its settlement.
Trading takes place every business day from Sunday to Thursday in a single period from 10 am to 3 pm, during which orders are executed.
Outside these times, orders are allowed to be entered, modified, and canceled from 9:30 in the morning until 10 in the morning.

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The transactions are executed through automatic matching of orders, and orders are received and prioritized according to the price. In general,
the market orders are executed first, which are the orders that include the best prices, followed by the fixed-price orders, and in the event that
several orders are entered at the same price, they are executed according to the time of entry.

The Tadawul system distributes a comprehensive range of information through various channels, most notably the Tadawul website. Market
data is provided instantly to well-known information providers such as “Reuters”. Deals are automatically settled within two business days
(T+2).

The Company must disclose all important decisions and information regarding investors through the “Tadawul” system. The Tadawul System
is responsible for monitoring the market, with the aim of ensuring fair trading and the efficiency of market operations.

14.4 Trading the Company Shares in the Saudi Stock Exchange

An application has submitted with the CMA to register and offer the Right Issue shares on the Saudi stock Exchange, and a request has been
made to the stock exchange (Tadawul) to be list and offer the New Shares, and this Prospectus has been approved, and all requirements have
been met.

The listing and offering are expected to be approved, and trading is expected to commence on the Saudi Stock Exchange (Tadawul) once the
final allocation of the rights has been concluded. An announcement will be made on Tadawul website in due course. The dates and times stated
in this Prospectus are only provisional and may be changed subject to approval of the CMA.

Although Current Shares are registered in the Saudi stock market and the Company is listed on the stock exchange (Tadawul), the New Shares
cannot be traded except after the final allocation of shares has been approved and deposited in the subscribers’ portfolios. Trading in new shares
prior to the approval of the allocation process is strictly prohibited.

The underwriters and the bidders of the Rump Offer who deal in these prohibited trading activities bear full responsibility for them, and the
Company will not bear any legal responsibility in this case.

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15. Documents Available for Inspection

The following documents will be available for inspection at the Company’s head office located in the city of Dammam, first floor, ATCO
Building, King Khalid Street, Zip Code: Al Khobar 31952, P.O. Box 3501, between (8) a.m. and (4) p.m., on the first working day after the
Extraordinary General Assembly invitation, provided that the period is not less than 14 days before the date of the Extraordinary General
Assembly. These documents will remain available for inspection until the end of the offering period.

15.1 The Company’s Bylaws and Other Constituent Documents

- Commercial Registration Certificate.
- Bylaws.
- Articles of Association.

15.2 Approvals Related to the Rights Issue

- Board recommendation increasing the capital.
- Insurance Authority non-objection on the capital increase.
- Saudi Exchange conditional approval for the Rights Issue Offering.
- CMA approval for the Rights Issue Offering.
- EGM resolution on the capital increase.

15.3 All reports, letters and other documents, value estimates or statements by any
expert and any part of which is extracted or referred to in the Prospectus
- Underwriting Agreement and Lead Management Agreement.
- Written consent of the Financial Advisor, Lead Manager, Underwriter, Legal Advisor and Auditors and Actuarial Consultants
to use their names, logos and statements within the Prospectus.

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