Article 31 Memorandum and Articles of Association
A copy of the Memorandum and Articles of Association should be incorporated by reference in the prospectus.
The following information shall be provided:
31.1.1 With respect to directors, provide a summary of any provisions of the issuer's Articles of Association, or charter and by-laws with respect to: (a) a director's power to vote on a proposal, arrangement or contract in which the director is materially interested; (b) the directors' power, in the absence of an independent quorum to vote for compensation to themselves, or any members of their body; (c) borrowing powers exercisable by the directors, and how such borrowing powers can be varied; (d) retirement or non-retirement of directors under an age limit requirement; and (e) number of shares, if any, required for the director's qualification.
31.1.2 Describe the rights, preferences and restrictions attached to each class of shares, including: (a) dividend rights, including the time limit after which dividend entitlement lapses and an indication of the party in whose favour this entitlement operates; (b) voting rights, including whether directors stand for re-election at staggered intervals, and the impact of that arrangement where cumulative voting is permitted or required; (c) rights to share in the issuer's profits; (d) rights to share in any surplus in the event of liquidation; (e) redemption provisions; (f)
sinking fund provisions; (g) liability to further capital calls by the issuer; and (h) any provision discriminating against any existing or prospective holder of such securities as a result of such shareholder owning a substantial number of shares.
31.1.3 Describe what action is necessary to change the rights of holders of the shares, indicating where the conditions are more significant than is required by law.
31.1.4 Describe the conditions governing the manner in which annual general meetings and extraordinary general meetings of shareholders are convened, including the conditions of admission.
31.1.5 Describe any limitations on rights to own securities, including the rights of foreign shareholders to hold, or exercise voting rights on the securities imposed by foreign law, or by the charter or other constituent document of the issuer or state that there are no such limitations if that is the case.
31.1.6 Describe the limitations, if any, on voting power in annual general meetings of shareholders, including such limitations on the voting power of brokerage firms, nominees, portfolio managers and any other person who holds or manages the portfolios on behalf of others.
31.1.7 Describe briefly any provision of the issuer's Articles of Association that would have the effect of delaying, deferring or preventing a change in control of the issuer or that would operate only with respect to a merger, acquisition, or corporate restructuring involving the issuer (or any of its subsidiaries).
31.1.8 Describe provision in the Articles of Association, if any, governing the ownership threshold above which shareholder ownership must be disclosed.
31.1.9 With respect to Articles 31.1.1 through 31.1.8 above, if the law applicable to the issuer in these areas is significantly different from that in the Kingdom of Bahrain, the effect of the law in these areas should be explained.
31.1.10 Describe the conditions imposed by the Memorandum and Articles of Association governing changes in the capital, where such conditions are more stringent than is required by law.
31.2 Material Contracts
Provide a summary of each material contract, other than contracts entered into in the ordinary course of business, to which the issuer or any member
of the group is a party, for any outstanding contracts at the time of publication of the document, including dates, parties, general nature of the contracts, terms and conditions, and amount of any consideration passing to or from the issuer, or any other member of the group.
Describe any governmental laws, decrees, regulations or other legislation of the home country of the issuer that may affect:
31.3.1 The import or export of capital, including the availability of cash and cash equivalents for use by the issuer's group.
31.3.2 The remittance of dividends, interest or other payments to non-resident holders of the issuer's securities.
The issuer shall provide information regarding taxes (including withholding provisions) to which shareholders in the Kingdom of Bahrain and in the host country(s) may be subject. Information should be included as to whether the issuer assumes responsibility for the withholding of tax at source and regarding applicable provisions of any reciprocal tax treaties between the home country and the host countries or a statement, if applicable, that
there are no such treaties.
31.5 Dividends and Paying Agents.
Disclose any dividend restrictions, the date on which the entitlement to dividends arises, if known, and any procedures for non-resident holders to
claim dividends. Identify the financial organizations, which at the time of admission of shares to the official listing are the paying agents of the issuer in the countries where admission has taken place, or is expected to take place.
31.6 Statement by Experts
Where a statement or report attributed to a person as an expert is included in the document, provide with that person's consent, their name, address
and qualifications and a statement to the effect that such a report is included, the form and context in which it is included, and who authorized
the contents of that part of the document.
31.7 Documents on Display
The issuer shall provide an indication of when the issuer's documents (referred to in the report) may be inspected. Exhibits and documents on
display should generally be translated into Arabic and/or English. Such documents, as well as the prospectus, must be made available by the issuer
in the Kingdom of Bahrain simultaneously with the public offering or listing.
Information relating to the issuer's subsidiaries eligible for consolidation under IAS must be provided, if such information is not otherwise called for by the International Accounting Standards used in preparing the financial statements.
Provide information in respect of the matters mentioned below, relating to unconsolidated subsidiaries that are not held for resale and that are likely to have a significant effect on the assessment of the issuer's own assets and liabilities, financial position or profits and losses:
(a) the name and address of the registered office;
(b) the principal activities;
(c) the proportion of capital held;
(d) the issued capital;
(e) the reserves;
(f) the profit or loss arising out of ordinary activities after tax (if any), for the last three financial years,
(g) the value at which the issuer shows in its accounts the interest held;
(h) any amount still to be paid up on shares held;
(i) the amount of dividends received in the course of the last three financial years in respect of shares held; and
(j) the amount of the debts owed to and by the issuer, with regard to the undertaking .
31.8.2 The items of information listed above must be given in any event, for every undertaking in which the issuer has a direct or indirect participating interest, if the book value of that participating interest represents at least 20% of the consolidated net assets (or capital and reserves of the company's own accounts, if required to be provided), or accounts for at least 20% of the consolidated net profit or loss of the
group (or the issuer's own accounts, if required to be provided). The information required by (e) and (f) above may be omitted where the undertaking in which a participating interest is held does not publish annual accounts.
31.8.3 With the permission of the Agency, the information required by (d) to (i) above may be omitted if the annual accounts of the undertakings in which the participating interests are held are consolidated into the group's annual accounts, or if the value attributable to the interest under the equity method or its fair value evaluation is disclosed in the annual accounts, provided that the omission of the information is not likely to mislead the public with regard to the facts and circumstances, knowledge of which is essential for the assessment of the security in question. With the permission of the Agency, the information provided for under points (g) and (j) may be omitted, if such omission does not mislead investors.
31.8.4 Provide individual details relating to the undertakings not referred to in Article 31.8.1 above, in which the issuer holds at least 20% of the share capital. The name and registered office of the undertaking and the proportion of the capital held may be omitted when they are of negligible importance.
When the document includes consolidated annual financial statements, provide disclosure:
(a) of the consolidation principles applied (which must be described in detail); where such principles are not consistent with International Financial Reporting Standards;
(b) of the names and registered offices of the undertakings included in the consolidation, and where this information is important for the purpose of assessing the assets and liabilities, the financial position and the profits and losses of the issuer. It is sufficient to distinguish them by a symbol in the list of undertakings of which details are required in item Article 31.8.1 above; and
for each of the undertakings referred to in 31.8.5 above:
(i) the total proportion of third-party interest, if annual accounts are wholly consolidated;
(ii) the proportion of the consolidation calculated on the basis of interests, if consolidation has been effected on a pro rata basis.