The following sections contain additional disclosures in accordance with the laws and regulations of Saudi Arabia, including the SAMA Insurance Corporate Governance Regulations, and the CMA Corporate Governance regulations.
SAMA and other Regulatory bodies executive orders:
| # | Violation Subject | Previous Financial Year (2020) | Current Financial Year (2021) | ||||
| Number of Executive Orders | Total Amount of Fines in Saudi Riyal | Correction and avoidance actions | Number of Executive Orders | Total Amount of Fines in Saudi Riyal | Correction and avoidance actions | ||
| 1. | SAMA’s Supervisory and Monitoring Violation | 1 | – | – | 3 | 80,000 | The Company has developed a corrective plan to address and implement all requirements to ensure that they do not fall into the future |
| 2. | SAMA’s Consumers Protections Violation | – | – | NA | – | – | NA |
| 3. | SAMA’s AML/CTF due Diligence Violation | – | – | NA | – | – | NA |
| 4. | A Fine by Civil Defence (No Safety Officer and others) | 1 | 40000 | A plan was developed to ensure the correction of the violations and to ensure it is avoided in the future | 0 | 0 | NA |
| 5. | Cancellation of Municipal Licenses (Licenses of old branches under the main CR) | 0 | 0 | NA | 6 | 3000 | Licenses are cancelled. |
| 6. | Violation from ejadh (Riyadh baladya) for Riyadh building (Violation of municipal visit at the time of coved-19) | 0 | 0 | NA | 1 | 3200 | Violations were corrected. |
| 7. | Non-renewal of the Municipal License – Jeddah HQ) | 0 | 0 | NA | 1 | 200 | A plan was developed to track and monitor licenses expiry dates to ensure renewal on time. |
Subsidiaries
| # | Subsidiary Company |
Capital (SR) | Ownership (%) | Purpose | Remarks | Country of Main Operations | Country of Incorporation |
| 1. | Bupa Arabia for third party administration | 5,000,000 | 100% | Provide third party administration services. | Under licensing | Saudi Arabia | Saudi Arabia |
| 2. | Bupa Arabia ventures | 2,000,000 | 100% | Invest in world-class business partners with solutions that can integrate with Bupa Arabia’s digital ecosystem and accelerate its development | Under incorporation | Saudi Arabia | Saudi Arabia |
No Borrowings or Loans
The Company, and the Board, confirms that it has no borrowings or loans outstanding at the end of the current twelve-month period, nor has it been required to make any payments against borrowings or loans.
Declarations Relating to Debt Instruments, Options, Warrants and Rights
As required in terms of the CMA disclosure requirements, the Company, and the Board, confirms the below declarations:
- That it has not issued, nor granted, any convertible debt instruments, options, warrants or similar rights during the financial year and accordingly has not received any consideration for the same.
- That it has not converted, nor issued, nor granted, any subscription rights under any convertible debt instruments, contractually based securities, warrants or similar rights during the financial year.
- That it has not redeemed, purchased or cancelled any redeemable debt instruments during the financial year. The Company has no such securities outstanding so the value of the same is nil.
Description of any Punishment, Penalty or Statutory Reserve or Restriction Imposed on any of the Board Members by any Judicial, Supervisory, or Regulatory Authority in Respect of the Company
The Company declares that there is no punishment, penalty, statutory reserve or restriction imposed on any of the Board Members by any judicial, supervisory, or regulatory authority in respect of the Company.
Long-Term Incentive Plan (LTIP)
Bupa Arabia purchases shares held under the employee share scheme to hedge itself against adverse changes in fair value of its shares between the grant date and the date on which these shares are transferred to employees. When shares recognized as equity are repurchased, the amount of the consideration paid, which includes directly attributable costs, is recognized as a deduction from equity. Repurchased shares are classified as shares held under an employee share scheme and are presented in the statement of changes in equity. The Company secures advance GA approval for the annual purchase of the LTIP shares for each LTIP cycle.
In 2021, the 24 June General Assembly approved the purchase of the Long-Term Incentive Plan (“LTIP”) shares to a maximum value of SR 21,240,542 to a maximum number of shares of 326,000. In addition, the 4 November General Assembly approved the purchase of the Long-Term Incentive Plan (“LTIP”) shares to a maximum value of SR 14,275,332 to a maximum number of shares of 220,000. As of 31 December 2021, the Company holds a total of 508,100 LTIP shares with a cost of SR 53.4 million on behalf of the LTIP participants.
Maintenance of Proper Records and Books of Account
As stipulated by Saudi Arabian insurance regulations, the Company, and the Board, confirms that proper books of account have been maintained and that it maintains separate accounts for each of insurance operations and shareholder operations, within its accounting records, and can confirm that it has maintained proper accounting records during the financial year.
Unqualified Opinion of the Independent External Auditors
The joint independent External Auditors’ report contains an unqualified opinion that the financial statements, taken as a whole, present fairly in all material aspects the financial position of the Company, and are in compliance with the requirements of the regulations for companies and the Company’s By-Laws.
Internal Control System and Effectiveness
As required in terms of the CMA disclosure requirement, the Audit Committee noticed Management’s continuous efforts and focus on improving design and effectiveness of Bupa Arabia’s internal control environment. Based on the results of the internal audit reviews and the planned activities to enhance the internal control environment, and following discussion with the External Auditor and management on the preliminary and annual financial statements for the year ended 31 December 2021, nothing has been brought to the attention of the Committee that would indicate any significant deficiencies.
Continuation as a Going Concern
The Company confirm there are no significant doubts about the Company’s ability to continue as a going concern.
External Auditors
The Extraordinary General Assembly of the Company held on 24 June 2021 approved the appointment of the External Auditors Ernst & Young, and PricewaterhouseCoopers, as joint auditors, as recommended by the Audit Committee, to audit the Company’s quarterly financial statements for the first, second, and third quarters, the annual financial statements for the fiscal year 2021 and first quarter for the fiscal year 2022.
Independent External Actuary
Bupa Arabia’s independent external actuary, for the 2021 fiscal year was Lux Actuaries.