RIYADH: Saudi Arabia is working toward improving transparency and bolstering corporate governance, with the Commerce Ministry issuing clarifications on the preparation of financial statements of joint-stock companies.
According to the ministry’s statement, preparing financial statements is incumbent upon the board of directors at the culmination of each fiscal year.
This process entails attaching a comprehensive report outlining the company’s operational and financial performance over the preceding year.
The statement added that proposed profit distribution methodologies are also a part of this documentation.
Moreover, the statement said the pertinent documents must be made available for audit, if applicable, a minimum of 45 days before the slated general assembly meeting.
The all-inclusive report of the joint-stock company should be signed by the CEO, financial director, and chairman of the board of directors. A copy of this signed report must be kept at the company’s headquarters, accessible to shareholders, as per the ministry’s procedure.
To facilitate the convening of the general assembly, the chairman is required to deposit these signed documents, along with the auditor’s report if available, at least 21 days before the intended assembly date, the statement added.
The ministry allows for exceptions to this provision in cases where reports have been previously published through modern digital means, in line with regulations.
The Saudi Commerce Ministry’s efforts to streamline regulations reflect its commitment to establishing a prominent position for the Kingdom in a fair and stimulating business environment.
In April, the ministry identified 10 priority projects in the trade and investment sector this year amid efforts to review and upgrade regulations and legislation in order, the Saudi Press Agency reported.
The move is aimed at supporting the Saudi Vision 2030 goal of creating an attractive investment landscape for local and international investors while bolstering the regional and global competitiveness of the business sector.
According to the report, reforms encompassed various aspects such as consumer protection, commercial registration, trade names, commercial transactions, mediation, and the establishment of government firms. This approach also addressed the family business charter, corporate governance regulations, commercial registration system implementing rules, and trade names system implementing regulations.
