SIIG Annual Report 2014. 13e

Annual report
2014
Contents
The Board of Directors’ Report 6
8 First: The SIIG Establishment

and Activities
Second: SIIG’s Projects 9
Third: The Related Risks to the

15
main SIIG’s business
Fourth: The Company’s 16

Financial Results
18 Fifth: Dividends’ Policy
Sixth: Loans and Debt

Instruments 20
22 Seventh: The SIIG’s

Management
Eighth: Due Regular Payments 28
Ninth: Transactions with

29
Related Parties
Tenth: Corporate Governance 30

Regulations
31 Eleventh: General Disclosures

Twelfth: Annual Review Results
of the Effectiveness of the 32
Internal Control procedures
Thirteenth: Declarations by the
32 Board of Directors and Senior
Executives
Fourteenth: Recommendations
to the Company Ordinary 32
General Assembly
Consolidated Financial
35 Statements For The Year Ended
31 December 2014
4
Custodian of the Two Holy Mosques
King Salman Bin Abdulaziz Al-Saud
His Royal Highness His Royal Highness

Prince Mohammed Bin Salman Bin Prince Mohammed Bin Naif Bin
Abdulaziz Al-Saud Abdulaziz Al-Saud
Deputy Crown Prince, Second Deputy Prime Crown Prince, Deputy Prime Minister
Minister And Minister of Defense And Minister of Interior
6
The Board of Directors’ Report

Saudi Industrial Investment Group (SIIG)
In the name of God, the Most Merciful, the Compassionate
Dear shareholders of the Saudi Industrial Investment Group (SIIG)
Peace, God’s mercy and blessings be upon you
The members of the Board of Directors as well as me are pleased to submit the annual
report for the fiscal year ended December 31, 2014.
The year 2014 was a good year for the petrochemical industries’ sector where the products’
maintained good prices and the global demand for them continued, but the prices started
to go down affected in the fourth quarter of the year by the global drop of oil prices.
The Company’s results indicate an unprecedented rise in profits from SAR714 million in
2013 to SAR933 million in 2014, which is attributed to the improved projects of the Na-
tional Petrochemical Company (Petrochem). The construction works of the Company’s
fourth project (Petrochemical Processing Company) for producing nylon 6.6 and some
conversion products were completed so as to commit to the terms of the gas allocation
issued by the Ministry of Petroleum and Mineral Resources, noting that the Company will
face challenges in such industries because of high production capacities, global products’
competitiveness, difficulty of marketing, and profit marginality. The Company will con-
tinue to achieve its objectives, namely maximizing its shareholders’ return, increasing the
saudization rate in its projects, and paying attention to security and safety in its facilities.
Finally, I would on my own behalf and on the behalf of the Board of Directors members to
thank with much appreciation the Custodian of the Two Holy Mosques and his wise gov-
ernment for its continuous support to industrial Sector.
Board Chairman
Hamad Bin Saud Al-Sayari
Members of the Board of Directors Saudi Industrial Investment Group
His Excellency Mr. Hamad bin Saud Al-Sayari

(Chairman)
Mr. Ibraheem bin Abdul Aziz Altouk Mr. Hatem bin Ali Aljaffali Dr. Abdulrahman bin Sulaiman Alrajhi
Mr. Saleh bin Aid Alhusayni Mr. Saad bin Ali Alkatheeri His Excellency Mr. Sulaiman
bin Abdulrahman Alkouwaiz
Mr. Ahmed bin Mohammed Abeed bin Zakr Mr. Sulaiman bin Mohammed Almendeel
(Managing Director)
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8
First: The SIIG Establishment and Activities:
The Saudi Industrial Investment Group SIIG was established by the resolution of the Ministry of Com-
merce and Industry no.291 dated 29th of JumadaII,1416 AH (November 23, 1995AD); it is a Saudi joint
stock company based in Riyadh, Saudi Arabia, and commercially registered under no.1010139946 on
Shaaban10, 1416 AH(January 1, 1996AD) with a capital of SAR4,500 million. The Company is en-
gaged in developing the industrial base in the Kingdom – particularly the petrochemicals – together
with exporting those to foreign markets and allowing the private sector to join other industries us-
ing petrochemical products. The Company has obtained the required licenses from the competent
authorities, as most of the Company's operating revenues come from this activity.
Second: SIIG’s Projects:
1. Saudi Chevron Phillips Company(SCP):
SCP is a limited liability company registered in Jubail, Saudi Arabia, under no. 2055003839 on Safar
22, 1417AH (July 8, 1996 AD) and with a capital of SAR 655 million. It is a 50-50 joint venture company
between the Saudi Industrial Investment Group (SIIG) and Arabian Chevron Phillips Petrochemical
Company (Ltd.). SCP is located in Jubail Industrial City and it started production in 2000; it produces
Benzene, Cyclohexane and Motor Gasoline.
The SCP’s total sales in 2014 were SAR 6,285 million compared to SAR 6,479 million in 2013. SCP
achieved net profits of SAR 1,089 million in 2014 compared to SAR 1,349 million in 2013. The follow-
ing is the geographical distribution of the SCP’s revenues in 2014:
2%
18%
GCC
40%
KSA
Europe
Asia 40%
The following chart illustrates price comparison in SCP products’ prices since the beginning of 2013
until the end of 2014:
Cyclohexane
Dollar / Ton 2013 2014
1800
1600
Benzene 1400
1200
1000
Motor Gasoline 800
600
400
200
0
1 2 3 4 5 6 7 8 9 10
11 12 1 2 3 4 5 6 7 8 9 10
11 12
9
10
2. Jubail Chevron Phillips Company (JCP):

It is a limited liability company registered in Al-Jubail, Saudi Arabia, under no. 2055005901 on the
25th of Jumada II, 1424 AH(August 23, 2003 AD), with a capital of SAR1,477 million. It is a 50-50 joint
venture company between the Saudi Industrial Investment Group and Arabian Chevron Phillips Pet-
rochemical Company (Ltd.), located in Al Jubail Industrial City and began production in 2008, where
it produces styrene and propylene.
The JCP’s total sales in 2014 were SAR 7,265 million compared to SAR 6,765 million in 2013. JCP
achieved net profits of SAR 130 million in 2014 compared to SAR 400 million in 2013. The following
is the geographical distribution of the JCP’s revenues in 2014:
11%
Asia
81%
KSA
Europe 17%
The following chart illustrates the difference in JCP products’ prices since the beginning of 2013 until
the end of 2014:
Dollar / Ton 2013 2014

Styrene 1800
1600
Propylene 1400
1200
1000
800
600
400
200
0
1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12
3. National Petrochemical Company - Petrochem (Public Joint Stock
Company):
Petrochem is a Saudi joint stock company based in Riyadh, Saudi Arabia, and commercially regis-
tered under no.1010246363 on the 8thof Rabi’ Al-Awwal, 1429AH (March 16, 2008) with a capital of
SAR4,800 million. The SIIG owns 50% of the shares of the National Petrochemical Company (Petro-
chem). The Petrochem is liable for financial responsibilities as loans and guarantees for its project
(Saudi Polymers Company) and the SIIG acts as the guarantor of certain obligations of Petrochem.
The Petrochem is engaged in developing, establishing, operating, managing and maintaining pet-
rochemical, gas and oil plants as well as other industries, and wholesale and retail trade of the petro-
chemical materials and products and their derivatives. Petrochem total sales amounted to SAR 7,859
million in 2014 compared to SAR4, 437 million in 2013. Petrochem achieved net profits of SAR774
million in 2014 compared to a loss of SAR (66) million in 2013. Petrochem is limited to its investments
in its subsidiary, namely:
The Saudi Polymers Company (SPCo):
SPCo is a limited liability company in Jubail, Saudi Arabia, commercially registered under no.
2055008886 on the 29th of Dhul-Qa’dah, 1428 AH (December 9, 2007) with a capital of SAR4,800
million. The National Petrochemical Company (Petrochem) owns 65% and Arabian Chevron Phillips
Petrochemical Company (Ltd.) 35%. SPCo is located in Jubail Industrial City where it produces the
following products:
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Product Production amount (one thousand tons)
Ethylene 1,220
Propylene 440
Polyethylene 1,100
Polypropylene 400
Hexane-1 100
GPPS polystyrene 100
HIPS polystyrene 100
The commercial operation began in the fourth quarter of 2012 and the Company markets the prod-
ucts within the Kingdom. The Gulf Polymers Distribution Company (GPDC) sells the products in for-
eign markets. Petrochem 65% and Arabian Chevron Phillips Petrochemical Company (Ltd.) 35% own
GPDC. GPDC was established in 2011 as a limited liability company registered in the free zone of
Dubai Airport, United Arab Emirates, with a capital of AED 2 million. Its activity is limited to storing
and selling polymers outside the Kingdom and which produced by SPCo. The total sales of the SPCo
in 2014 amounted to SAR 7,224 million compared to SAR 4,547 million in 2013. SPCo achieved net
profits of SAR 1,178 million compared to a net loss of SAR (45.4) million in 2013. The geographical
distribution of the sales of SPCo in 2014 is as follows:
The chart below shows Petrochem’s ownership percentage in the project as well as the major share-
holders’ percentages in Petrochem. The SPCo’s ownership distribution is as follows:
9%
Asia
34%
Europe
KSA 57%
General
Saudi Industrial
Organization Public Pension
Investment Group Public 17.6%
for Social Agency 16.2%
50%
Insurance 16.2%
National Arabian
Petrochemical Chevron Phillips
Company Petrochemical
(Petrochem) 65% Company 35%
Saudi Polymers
Company SPCo
4. Petrochemical Conversion Company (PCC):
It is a limited liability company in Jubail, Saudi Arabia, commercially registered under no.2055013878
on Shaaban29,1432 AH(July 30, 2011) with a capital of SAR1,894million. It is a 50-50 joint venture
company between the Saudi Industrial Investment Group and Arabian Chevron Phillips Petrochemi-
cal Company (Ltd.). This conforms to the terms of the gas allocation issued by the Ministry of Petro-
leum and Mineral Resources, as SIIG and its partner, Arabian Chevron Phillips Petrochemical Com-
pany (Ltd.), have implemented ten projects, the first of which targets the production of nylon 6, 6
in the Kingdom in addition to several converting projects to produce numerous products required
for consumers’ needs. The project will be established on an area of 510,000 square meters in Jubail
Industrial City. The PCC’s products are shown in the following table:
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Productive capacity
Plant Products
(1000 tons)
Nylon 6,6 50
Insulators, fibers, tires, hoses,
clothes, bags
Nylon Compounding 20
HDPE pipes 30 Infrastructure and construction pipes
Drip Irrigation 30 Irrigation pipes and their accessories
Automotive small parts 4 Fans, internal mirrors
Automotive under hood parts 15 Plastic engine covers
Electrical Fittings 10 Conductors, cables and switches
Medical Specialties 4 Medical containers
Pharmaceutical Packaging 5 Plastic bags
Caps & Closures 20 Caps & Closures
The conversion plants started operation in 2014, and the nylon 6.6 plant as well as the nylon com-
pounding are expected to start operation during 2015, with an estimated total cost of SAR (2.900
million). Estimates and forecasts of these projects refer to the difficulty in achieving good profit
margins as a result of the high production capacities, global products’ competitiveness, difficulty of
marketing and lack of consumers for the produced quantities in the region. However, the project
administration seeks to build a good fundamental base for such industries and attract international
companies to these industries to involve in partnerships and agreements beneficial to the Com-
pany’s investments.
5. Projects’ Integration:
The three projects (SCP, JCP, and SPCo) are integrated to each other where they produce different
products with a total capacity up to 6,400 thousand tons. Some of these products are consumed
internally to produce value-added products, where the quantities available for sale, both locally and
internationally, are 3,800 tons per year:
Cyclohexane 290 KTA Benzene 835 KTA
Natural
SCP
Gasoline
MoGas 780 KTA
Propylene 150 KTA

Natural
JCP
Gasoline
Styrene 730 KTA Ethylene 230 KTA
Polystyrene HIPS 100 KTA
Polystyrene GPPS 100 KTA
Polyethylene 1100 KTA

Ethylene 1220 KTA
Hexane-1 100 KTA Ethane
SPCo
Polypropylene 400 KTA Propane

Propylene 440 KTA
Propylene 40 KTA
Third: The Related Risks to the main SIIG’s business:

The following risks might affect the company basic industries:
ll Prices of raw materials the Company production depends on.
ll Risks of feedstock supply, and meeting the terms of the supply of feedstock agreement with
Aramco.
ll Global economy status that may reduce the demand for the Company’s products, and that may
be reflected on the price of products.
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16
ll High competitiveness in the market by which the Company is affected in terms of supply and
demand.
ll Risks of operational performance level which include many techniques and equipment that
may be subject to shut down and failure.
ll Human resources’ risks associated with the instability of the Saudi efficiencies regarding the
development and continuation of the Company’s performance.
ll Environmental risks associated with the petrochemical industries such as pollution and their
consequent fines and costs.
ll Uncertainties associated anti-dumping issues in markets where the Company sells its products.
Fourth: The Company’s Financial Results:

a. A summary of the Company’s business for the fiscal years 2010 -2014:
The following table shows the Company’s business over the past five years:
Balance Sheet:
Applied accounting policy Equity method Proportionate Consolidation
(Balance Sheet) in millions of Saudi Riyals 2014 2013 2012* 2012* 2011 2010
Current assets 4,825.0 3,411.2 2,118.2 3,739.9 4,601.3 4,598.6
Non-current assets 21,525.3 21,962.8 22,350.1 22,496.5 21,067.0 19,075.7
Total assets 26,350.3 25,374.0 24,468.3 26,236.4 25,668.3 23,674.3
Current liabilities 2,111.6 2,426.1 1,189.1 2,051.5 966.7 895.4
Non-current liabilities 13,059.0 13,121.7 13,672.0 14,577.7 14,728.1 13,064.2
Total liabilities 15,170.6 15,547.8 14,861.1 16,629.2 15,694.8 13,959.6
Total Shareholders’ equity 11,179.7 9,826.2 9,607.2 9,607.2 9,973.5 9,714.7
Total liabilities & Shareholders’ equity 26,350.3 25,374.0 24,468.3 26,236.4 25,668.3 23,674.3
* 2012 results were presented by using the equity method and Proportionate Consolidation method to facilitate comparison.
Income Statement:
Applied accounting policy Equity method Proportionate Consolidation
(Income Statement) in millions of 2014 2013 2012* 2012* 2011 2010

Saudi Riyals
Sales 7,858.5 4,436.6 857.9 5,556.0 4,476.0 3,265.6
Cost of Revenues (5,559.5) (3,710.1) (1,336.7) (5,036.2) (3,693.7) (2,621.6)
Total profit (loss) 2,299.0 726.5 (478.8) 519.8 782.3 644.0
Company’s share in the common ad- 604.5 880.5 825.5 - - -

ministered projects’ revenues, net
General, administrative and marketing (806.6) (572.1) (215.0) (366.0) (189.3) (143.4)
expenses
Income (loss) of the main operations 2,096.9 1,034.9 131.7 153.8 593.0 500.6
Financial charges (172.2) (202.9) (21.9) (40.4) (20.7) (21.4)
Other revenues (expenses), net 7.4 (57.8) 67.8 64.2 19.8 21.1
Income (loss) before minority interest 1,932.1 774.2 177.6 177.6 592.1 500.3
and Zakat
Minority interest shares in the net (prof- (872.0) 43.2 453.2 453.2 43.7 14.0
its) loss of the subsidiaries
Income before zakat 1,060.1 817.4 630.8 630.8 635.8 514.3
Zakat (126.8) (103.3) (92.1) (92.1) (107.3) (109.7)
Net income 933.3 714.1 538.7 538.7 528.5 404.6
Earnings per share in Saudi riyals 2.07 1.59 1.20 1.20 1.17 0.90
* 2012 results were presented by using the equity method and Proportionate Consolidation method to facilitate comparison.
b. Fundamental differences in the operational results of the previous year’s results:

Items (millions of Saudi Riyals) 2014 2013 Changes +/- Change %
Total revenues 2,299.0 726.5 1,572.5 216%
Operational profits 2,096.9 1,034.9 1,062.0 103%
Net profits 933.3 714.1 219.2 31%
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The rise in the Company’s profits during 2014 is caused by an increase in the SIIG’s share of
Petrochem profits; the SIIG’s share of the achieved profits in Petrochem in 2014 amounted to
SAR 387 million compared to a loss of SAR (33) million in 2013. This is due to the regular operation
of Petrochem’s project (SPCo).
Future Prospects:
In general, the petrochemical market in the first three quarters of 2014 showed some increase in
demand because of a slight improvement in the global economic situation. With regard to the fu-
ture prospects concerning the Company’s project products’ prices in the global markets; it is difficult
to predict them in the meantime given their relation to a number of economic factors, the most
important of which is oil prices, which declined sharply in the fourth quarter of 2014. This, in turn,
affected all petrochemical products in general. With low products’ prices, however, the profit margin
is still positive regarding the Company’s projects. The company will devote its efforts in its projects
to achieve better revenues in 2015 through regular operations, production and sales in its projects.
Fifth: Dividends’ Policy:
According to the Company bylow, the distribution of annual net profits of the Company takes place
after deducting all general expenditures and other costs as follows:
1. Retaining provision for zakat.
2. Retaining 10% net profits as a statutory reserve. The Ordinary General Assembly may cease this
when the reserve reaches half the capital value.
3. From the remaining profit, 5% of the paid up capital is distributed as down payment to shareholders.
4. Then 10% of the remaining quantum is allocated to the board of director’s remuneration.
5. The remaining is then, distributed to the shareholders as an additional profits share.
The Company has achieved net profits as follows:
The dividends and shares’ grants were as follows:
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20
Petrochemical industry is known to be a fluctuating one by virtue of the change in the global prod-
ucts’ prices. Accordingly, it is difficult to predict the Company’s profits for the coming years, as this re-
quires reviewing the dividends’ policy periodically. In addition, the growth of the Company’s invest-
ments may require partial or complete self-financing from the Company’s cash flows, noting that
the Company aims at continuing and increasing the annual distributions to shareholders, whenever
achieved. The following table shows the profits’ balance:
Statement Balance (millions of Saudi Riyals)
Retained earnings balance on 01/01/2014 1,398
Dividends for 2013 (450)
Board members’ remuneration distributions for 2013 (1,8)
Net profits on 31/12/2014 933
10% transferred amounts to the statutory reserve. (93)
Accumulated retained earnings. 1,786
Proposed dividends for 2014 (450)
Board members’ remuneration for 2014 (1,8)
Retained earnings balance after distribution 1,334
Sixth: Loans and Debt Instruments:

SIIG does not has any loans directly, but its subsidiaries have outstanding loans as follows and which
show the loans’ information and movement in 2014:
The National Petrochemical Company – Petrochem* (millions of Saudi Riyals)

Total Loans Total Loans
Withdrawals Payment in Loan period
Lenders Total Loans Outstanding As Outstanding As
in 2014 2014 (year)**
of Dec 31, 2013 of Dec 31, 2014
Riyadh Bank 600 600 0 600 0 2
The SIIG’s share in Petrochem is 50%

Sukuks Instruments:
The National Petrochemical Company (Petrochem) has completed the issuance of sukuks conform-
ing to the Islamic Sharia in June2014 with a value of SAR 1,200 million for five years and their yield
is SIBOR(six months) +1.7%. The aim of the sukuks’ issuance is to cover the operating expenses of
Petrochem for the coming years as well as financing the needs of its project. Riyadh Capital and
Deutsche Securities act as the managers of this issuance.
Jubail Chevron Philips* (millions of Saudi Riyals)

Total Withdraw- Payment in Loan period
Lenders Outstanding As Outstanding As
Loans als in 2014 2014 (year)**
of Dec 31, 2013 of Dec 31, 2014
Saudi Industrial Development 800 320 0 120 200 8

Fund
Public Investment Fund 1,208 592 0 169 423 9
Local and Foreign Commercial 1,016 758 0 102 656 10

Banks
Total 3,024 1,670 0 391 1,279
* The SIIG’s share in Jubail Chevron Philips is 50%
** Payment began during 2009.
Saudi Polymers Company* (millions of Saudi Riyals)

Total Withdraw- Payment in Loan period
Lenders Outstanding As Outstanding As
Loans als in 2014 2014 (year)**
of Dec 31, 2013 of Dec 31, 2014
Saudi Industrial Development 1,200 1,150 0 130 1,020 7
Fund
Public Investment Fund 3,000 2,970 0 240 3,730 7.5
Local and Foreign Commercial 9,258 8,773 0 555 8,218 11

Banks
Total 13,458 12,893 0 925 11,968
* The SIIG’s share in Petrochem is 50%, and Petrochem’s share in the Saudi Polymers Company is 65%
** Payment began during 2013.
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Seventh: The SIIG’s Management:

a. Board Membership:
The Company is managed by a Board consisting of nine members who were elected for three
years on 08/04/2012 in the Extraordinary General Assembly meeting. Their membership began on
01/07/2012. The board session ends on 30/06/2015. The members are classified in accordance with
the definitions set forth in Article II of the Corporate Governance Regulations issued by the Capital
Market Authority and as follows:
Member’s name Position
HE. Hamad Bin Saud Al-Sayari (Chairman) Non-executive
Mr. Ibrahim Bin Abdul Aziz Altouq Independent
Mr.Hatem Bin Ali Al Jaffali Non-executive
Dr. Abdul Rahman Bin Sulaiman Al Rajhi Independent
HE .Sulaiman Abdul Rahman Al Qwaiz (representative of GOSI) Non-executive
Mr. Saleh Bin Eid Al Hussaini Independent
Mr. Saad Bin AliAl Kathiri (Representative of PPA) Non-executive
Mr. Ahmed Bin Mohammed Obeid Bin Zagr Non-executive
Mr. Sulaiman Bin Mohammed Al Mandeel (Managing Director) Executive
Participation of the board members in boards’ membership of other Joint Stock

Companies:
Name Board membership of other joint stock companies
Hamad Bin Saud Al-Sayari Board Chairman of (Petrochem)
Hatem Bin Ali Al Jaffali Board Chairman of Al Wataniya Insurance Company (Al Wataniya)
Board Chairman of Advanced Educational Company
Abdul Rahman Bin Sulaiman Board member of Al Rajhi Brothers Group

Al Rajhi Board member of Saudi Cement Company
Board member of Arab Sayob Company
Board Chairman of Banque Saudi Fransi
Sulaiman Abdul Rahman Al Board member of Saudi Arabian Mining Company (Ma’aden)
Qwaiz Board member of Etihad-Etisalat Company (Mobily)
Board chairman of Hassana Investment Company
Saleh Bin Eid Al Hussaini Board member of Saudi Cable Company
Saad Bin Ali Al Kathiri Board member of Alinma Bank
Sulaiman Bin Mohammed Al

Vice Board Chairman of (Petrochem)
Mandeel
b. Board of Directors’ Meetings:
The Board of Directors held three meetings during the fiscal year2014the member’s attendance as
follows:
During 2014
Member’s name Total attendees
April 30 September 3 December 18
Hamad Al-Sayari (Chairman) P P P 3
Ibrahim Altouq O P O 1
Hatem Al Jaffali O P P 2
Abdul Rahman Al Rajhi P P P 3
Sulaiman Al Qwaiz P P P 3
Saleh Al Hussaini P P P 3
Saad Al Kathiry P P P 3
Ahmed Bin Zagr P P P 3
Sulaiman Al Mandeel P P P 3
c. Remuneration and benefits paid to the Board Members and Senior Ex-
ecutives:
Five senior executives who
Executive Non-execu- received the highest bonuses and
Statement board mem- tive board compensations + chief executive Total
bers members officer and financial manager if
they were not included
Salaries’ and wages - - 3,964,017 3,964,017
Allowances 102,000 127,500 318,423 547,923
Periodic and annual remunera-

250,000 2,000,000 1,765,276 4,015,276
tions
Other compensation or non-

- - - -
monetary benefits
Total 352,000 2,127,500 6,047,716 8,527,216
The Board of Directors decided SAR two hundred thousand as a ceiling for each
member’s remuneration.
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d. Board Members’ Ownership:

It is a description of any interest pertaining to the Board members, their wives and dependent chil-
dren in the Company’s shares (Saudi Group) in 2014 as follows:
Year beginning Year end

Change
Member’s Name Net change
percentage
Shares’ number Shares’ number
Hamad Al-Sayari 200,000 200,000 0 0%
Ibrahim Al Touq 3,226,672 3,226,672 0 0%
Hatem Al Jaffali 3,801,900 3,801,900 0 0%
Abdul Rahman Al Rajhi 38,193 38,193 0 0%
Sulaiman Al Qwaiz* (GOSI) 9,951,432 22,142,272 12,190,840 122٫5٪
Saleh Al Hussaini 1,000 1,000 0 0%
Saad Al Kathiry** (PPA) 48,057,001 48,057,001 0 0%
Ahmed Bin Zagr 2,700 2,700 0 0%
Suleiman Al Mandeel 387,500 406,500 19,000 4.9%
* All shares belong to the GOSI, noting that Mr. Suleiman Al Qwaiz does not own any shares personally.
** All shares belong to the PPA, noting that Mr. Saad Al Kathiry does not own any shares personally.
A description of any interest pertaining to the Board members, their wives and dependent children
in the shares of the subsidiary (Petrochem) in 2014 as follows:

Change
Member’s name Net change
percentage
Hamad Al-Sayari 100,000 100,000 0 0%
Ibrahim Al Touq ---- ---- 0 0%
Hatem Al Jaffali ---- ---- 0 0%
Abdul Rahman Al Rajhi ---- ---- 0 0%
Sulaiman Al Qwaiz ---- ---- 0 0%
Saleh Al Hussaini ---- ---- 0 0%

Change
Member’s name Net change
percentage
Saad Al Kathiry ---- ---- 0 0%
Ahmed Bin Zagr ---- ---- 0 0%
Suleiman Al Mandeel 1,000 1,000 0 0%
Note: There are no debt instruments for the Board members in the Company or its subsidiaries.
e. Senior Executives’ Ownership:
It is a description of any interest pertaining to the senior executives, their wives and dependent chil-
dren in the Company’s shares (Saudi Group) in 2014 as follows:

Change
Senior Executive’s Name Net change
percentage
Hazem Marwan Abu Sweireh ---- ---- 0 0%
Mohammad Ali Al Dughaish ---- ---- 0 0%
A description of any interest pertaining to the senior executives, their wives and dependent children
in the shares of the subsidiary (Petrochem) in 2014as follows:

Change
Senior Executive’s Name Net change
percentage
Hazem Marwan Abu Sweireh ---- ---- 0 0%
Mohammad Ali Al Dughaish ---- ---- 0 0%
Note: There are no debt instruments for the senior executives of the Company or its subsidiaries.
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f. Board Committees:
Audit Committee:
The Committee held four meetings in 2014, and its tasks are as follows:
ll Studying the Company’s accounting policy.
ll Recommending the appointment of the external auditor.
ll Studying the initial and annual financial statements before approval and publishing.
ll Verifying the sufficiency of the regulatory activities’ designed for the Company and their effi-
ciency in an appropriate manner.
ll Evaluating the efficiency of the Company’s estimate of the important and potential risks and
how to monitor and face those risks.
ll Appointing internal auditors, verifying their independence and authorizing the internal audit
plan in the Company.
The Audit Committee consists of three members who all have practical and professional experience
qualifying them to participate actively in the works of the Audit Committee. They are as follows:
1. Abdul Rahman Bin Sulaiman Al Rajhi (Committee Head).
2. Saleh Bin Eid Al Hussaini (Committee Member).
3. Saad Bin Ali Al Kathiri (Committee Member).
Executive Committee:
The Committee held one meeting during the fiscal year 2014, and its tasks are as follows:
ll The Executive Committee carries out the same tasks of the Board of Directors in case of inabil-
ity to hold the Board meeting for any reason whatsoever.
ll After each meeting, the Committee submits a report to the Board of Directors stating all the
actions it takes during the meeting.
ll Whenever needed, the Committee may ask independent consultants to make specialized stud-
ies helping the Committee carry out its tasks and determine their fees.
Committee Members:
1. Hamad Bin Saud Al-Sayari (Committee Head).
2. Ibrahim Bin Abdul Aziz Al Tawq (Committee Member).
3. Suleiman Bin Mohammed Al Mandeel (Committee Member).
Nomination and Remunerations’ Committee:

The Committee held one meeting in 2014,and its tasks are as follows:
ll Recommending the nomination for the Board of Directors’ membership, taking into account
not to nominate any person who previously has been convicted of a crime involving a violation
of honor.
ll Reviewing the required needs annually, namely the appropriate skills for the Board member-
ship and preparing a description of the capabilities and qualifications required for the Board
membership, including the identification of the time that to be allocated by the member for
the Board duties.
ll Reviewing the Board structure and submitting recommendations regarding the possible
changes.
ll Identifying the points of weakness and strength of the Board and suggesting their solutions in
accordance with the Company’s interest.
ll Ensuring the independence of the independent members on annual basis and there is no con-
flict of interest in the participation of a board member in the Board of another company.
ll Developing clear policies for the remuneration of the Board members and senior executives as
well as making use of performance-related criteria in identifying those benefits.
27
28
Committee Members:
1. Ibrahim Bin Abdul Aziz Al Touq (Committee Head).
2. Sulaiman Abdul Rahman Al Qwaiz (Committee Member).
3. Ahmed Bin Mohammed Obeid Bin Zakar (Committee Member).
Social Responsibility Committee:

This Committee held one meeting in 2014. It carries out the following objectives and responsibilities
pertaining to the Company’s social contribution plans:
ll Developing plans pertaining principles and criteria of the Company’s social responsibility con-
tribution.
ll Develop and follow-up the programs in which the company participates to plant profound
feelings among its employees towards the company social responsibility.
ll Activate the Company’s role in adopting the social responsibility policies, initiatives and pro-
grams towards its shareholders, customers and suppliers as well as towards the environment
and society as a whole in order to support and enhance the Company’s reputation.
ll Submit recommendation to the board on the annual budget of the company social contribu-
tion.
Committee Members:
1. Saleh Bin EidAl Hussaini (Committee Head).
2. Hatem Bin Ali Al Jaffali (Committee Member).
3. Suleiman Bin Mohammed Al Mandeel (Committee Member).
Under the auspices of the Company in 2014, and in collaboration with the Institute of Public Ad-
ministration, it was approved to establish training and educational programs along with a variety of
workshops for the beneficiaries of several charities.
Eighth: Due Regular Payments:

The Company has no accrued loans or debts except the following:
Payment Description Paid in 2014 Due
Social insurance 124,204 11,032
Deduction taxes - -
Zakat 53,645,086 56,502,670
Chamber of Commerce and visas 9120 -

Ninth: Transactions with Related Parties:
In 2014, there were transactions with related parties on a commercial basis and which were as
follows:
Description of related parties Relation Nature of transactions
Without preferential terms, Al Jubail Chevron

Phillips(subsidiary of the Group) conducted transactions
and commercial contracts to sell styrene to Latex Compa-
ny, where the total transactions in 2014 amounted to SAR
The Arabian Chemical Company
48.6 million. The selling price conforms to the Asian mar-
Ltd. (Latex) chaired by Mr. Hatem Board member (SIIG)
ket minus the shipping cost, which is the usual market
bin Ali Al Jaffali
price for such agreements in the local market. Besides,
the Arabian Chemical Company Ltd. (Latex) bore the cost
of building a pipeline to transport the product from the
plant of Al Jubail Chevron Phillips to its factory.
Without preferential terms, the Saudi Industrial Invest-

ment Group and the National Petrochemical Company
(Petrochem) conducted many financial transactions
during the year, including common services and trans-
The National Petrochemical actions along with other transactions resulting from the
Subsidiary
Company (Petrochem) Group’s guarantees towards the lenders of Petrochem
project. The total transactions with Petrochem in 2014
amounted to SAR 27.6 million. In addition, the Saudi
Group invested in the sukuks issued by Petrochem in
2014 by SAR 130 million.
29
30
Tenth: Corporate Governance Regulations:

On 12/11/2006, the Capital Market Authority issued guidance on governance laws of joint stock
companies. The law covers the basis and standards regulate the Joint Stock Company’s performance.
The Company, represented by the Board of Directors, approved the following regulations:
No. Regulation Authorization body Authorization date
1 Principles for choosing the executive committee members Board of Directors
2 Disclosure and transparency regulation Board of Directors
3 Labor discipline regulation Board of Directors

5/2/2008
4 Internal audit regulation (Internal Audit Charter) Board of Directors
5 Conflict of interest regulation Board of Directors
6 Board tasks and responsibilities Board of Directors
Principles for choosing Nomination and remunerations’

7 General Assembly
committee
24/5/2008
8 Principles for choosing Audit committee General Assembly
9 Shareholders’ equity regulation Board of Directors

23/5/2009
10 General regulation Board of Directors
Board membership policies, standards and procedures’

11 General Assembly 22/5/2010
regulation
12 Regulation of arranging relationships with stakeholders Board of Directors 25/12/2011
The following table shows the rest of the guidance rules stated in the corporate governance
regulation:
Requirements stated in the regulation Implementation
The Company adopts the standard voting method as per the company’s
Adoption of cumulative voting laws issued by the Ministry of Commerce; the Company articles of associa-
tion do not include the cumulative voting.
Moreover, the Board of the Capital Market Authority issued the resolution no.(3-40-2012) on
30/12/2012 which necessitates developing a corporate governance regulation for the Company. On
22/06/2013, the Company Board of Directors adopted a corporate governance regulation through
the inclusion of regulations required by the Authority and which have already been approved in one
regulation. Their approval was recommended by the General Assembly on 30/04/2014.
Eleventh: General Disclosures:
ll The Company has potential liabilities in respect of a letter of guarantee issued by a local bank
for the Ministry of Petroleum and Mineral Resources pertaining to the Petrochemical Process-
ing Company. The guarantee value amounted to SAR 947 million.
ll The Company has potential liabilities in respect of a letter of guarantee issued by a local bank
for the lenders’ agent of the Saudi Polymers Company. The guarantee value amounted to SAR
734 million.
ll The Company issued a bank guarantee in favor of the Department of Zakat and Income worth
SAR 24 million to cover its appeal against the primary Committee’s resolution in the Depart-
ment of Zakat and Income for the year 2002 and 2003.
ll The Company issued a bank guarantee in favor of the Department of Zakat and Income worth
SAR11million to cover its appeal against the Committees’ resolution in the Department of Za-
kat and Income for 2004 and until 2006.
ll No any person or party informed the company about any personal interest in the share catego-
ries that entitled the right to vote in the fiscal year 2014.
ll The Company has not issued or granted debt instruments convertible into shares, or any op-
tion or subscription rights’ memorandums or any similar rights during the fiscal year 2014.
ll The Company has not issued or granted conversion or subscription rights under convertible
instruments in 2014.
ll The Company was not subject to any penalties, sanctions or precautionary restrictions of the
Capital Market Authority or any other supervisory or regulatory or judicial body in 2014, but
the Capital Market Authority on 9/2/2015 announced the issuance of a CMA Board resolution
to impose a penalty of SR 10,000 (Ten Thousand Saudi Riyals) on Saudi Industrial Investment
Group due to its violation of clause (A) of Article (40) of the Listing Rules. The company did
not clearly mention in its preliminary financial results announcement for the second quarter
of 2014 all the reasons affecting the decrease in the Net profit of the second quarter of 2014
compared to the same quarter of the previous year and compared to the previous quarter of
the same year.
ll There are no arrangements or waiver agreements under which a Board member or a senior
executive waiver any salary or compensation.
ll There are no arrangements or waiver agreements under which one of the Company’s share-
holders waiver his rights in profits.
31
32
Twelfth: Annual Review Results of the Effectiveness of the Internal

Control procedures:
The internal audit is a confirmatory, consultative, objective and independent activity designed to
add value, improve the Company’s operations and help the Company’s internal audit to achieve its
goals by providing a regular basis to adjust and improve the control effectiveness and the opera-
tions involved in the Company’s regulatory performance. The internal audit carried out numerous
periodic and private audits to ensure the performance accuracy and effectiveness in addition to
contributing to auditing the initial and final financial statements and coordinating the works of the
external regulatory bodies.
The Board reviewed the audit committee’s report on the audit results submitted by the internal au-
ditor. No fundamental matters have come to the surface; in addition, the internal regulatory system
turns out to be operating properly.
Thirteenth: Declarations by the Board of Directors and Senior Ex-

ecutives:
The Board of Directors declares that:
1. Proper books of account have been maintained.
2. The system of internal control is sound in design and has been effectively implemented.
3. There are no significant doubts concerning the issuer’s ability to continue.
4. There is no substantial interest for the members of the Board of Directors, chief executive of-
ficer, financial manager or senior executives in the Company’s contracts except what has been
disclosed in the item: transactions with related parties in this report.
Fourteenth: Recommendations to the Company Ordinary General

Assembly:
The Board of Directors recommends the Company’s Ordinary General Assem-
bly to agree on the following:
1. The financial statements and auditor’s report for the fiscal year ending on 31/12/2014.
2. Report of the Board of Directors for the fiscal year ending on 31/12/2014.
3. Releasing the liability of the Board of Directors for the fiscal year ending on 31/12/2014.
4. Appointing the auditor nominated by the Audit Committee for the fiscal year 2015 as well as
determining his fees.
5. Recommending the Board of Directors to distribute the dividends totaling SAR 450 million,
one Saudi Riyal per share (i.e. 10% of the nominal capital) to the Company’s shareholders reg-
istered in (Tad awul) records at the end of the day of the Assembly meeting.
6. Payment of SAR (1.8) million as a remuneration to the members of the Board of Directors, SAR
200 thousand for each member for the fiscal year ending on 31/12/2014.
7. The businesses and contracts conducted during the year ending on 12/31/2014 between Al
Jubail Chevron Phillips Company (subsidiary) and the Arabian Chemical Company, Ltd. (Latex)
whose Board of Directors is chaired by Mr. Hatem Al Juffali will be considered transactions with
related parties and will be licensed for one more year, where the Al Jubail Chevron Phillips
Company conducted transactions and commercial contracts - without preferential terms - for
selling styrene to (Latex) Company. The total transactions during 2014 amounted to SAR 48.6
million and the selling price was that of the Asian market minus the shipping cost, which is the
usual market price for such agreements in the local market.
8. The financial transactions conducted during the year ending on 31/12/2014 with the National
Petrochemical Company (Petrochem) will be considered transactions with related parties and
will be licensed for one more year, given the fact that the Saudi Industrial Investment Group
is a main shareholder in Petrochem with a share of 50%. The transactions represented financ-
ing, common services and bank guarantee commissions, without preferential terms. The to-
tal transactions with Petrochem in 2014 amounted to SAR 27.6 million. In addition, the Saudi
Group invested in the sukuks issued by Petrochem in 2014 by SAR 130 million.
9. Electing the Board of Directors for its next session which will begin on 01/07/2015.
Finally, the Board of Directors would like to thank with much appreciation the Custodian of the Two
Holy Mosques and his wise government for its continuous support to industrial sector and to all
sectors.
Board of Directors
33
34
Saudi Industrial Investment Group
and Its Subsidiary
(A Saudi Joint Stock Company)
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2014
35
36
SAUDI INDUSTRIAL INVESTMENT GROUP AND ITS SUBSIDIARY

CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2014
INDEX PAGE
Auditors’ report 37
Consolidated balance sheet 38
Consolidated statement of income 39
Consolidated statement of cash flows 40
Consolidated statement of changes in equity 41
Notes to the consolidated financial statements 42-59

37
38
Saudi Industrial Investment Group and Its Subsidiary

CONSOLIDATED BALANCE SHEET

As at 31 December 2014
Amounts in SR ’000 Note 2014 2013
ASSETS
CURRENT ASSETS
Cash and cash equivalents 4 1,798,773 1,509,892
Time deposits 559,000 -
Accounts receivable 988,614 688,024
Cash margins, prepayments and other assets 5 121,659 115,409
Amounts due from related parties 6 113,815 152,922
Inventories 7 1,243,139 930,957
TOTAL CURRENT ASSETS 4,825,000 3,397,204
NON-CURRENT ASSETS
Employees loans 5 49,713 28,572
Deferred charges 8 51,468 74,786
Investments in jointly controlled projects 9 3,154,039 3,233,928
Subordinated loans to jointly controlled projects 10 534,375 270,000
Property, plant and equipment 11 17,735,737 18,369,579
TOTAL NON-CURRENT ASSETS 21,525,332 21,976,865
TOTAL ASSETS 26,350,332 25,374,069
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable 213,705 244,262
Accrued liabilities and other liabilities 12 379,423 381,116
Amounts due to related parties 6 123,618 98,631
Current portion of long term loans 13 1,145,503 925,504
Short term loans - 600,000
Zakat 14 249,355 176,635
TOTAL CURRENT LIABILITIES 2,111,604 2,426,148
NON-CURRENT LIABILITIES
Term loans 13 10,822,328 11,967,831
Sukuk 15 1,070,000
Subordinated loan from non-controlling partner in a
16 1,131,797 1,131,797
subsidiary
Employees’ terminal benefits 34,861 22,064
TOTAL NON-CURRENT LIABILITIES 13,058,986 13,121,692
TOTAL LIABILITIES 15,170,590 15,547,840
EQUITY
SHAREHOLDERS’ EQUITY
Share capital 17 4,500,000 4,500,000
Statutory reserve 526,987 433,654
Retained earnings 1,786,459 1,398,259
TOTAL SHAREHOLDERS’ EQUITY 6,813,446 6,331,913
Non-controlling interests 4,366,296 3,494,316
TOTAL EQUITY 11,179,742 9,826,229
TOTAL LIABILITIES AND EQUITY 26,350,332 25,374,069
The accompanying notes from 1 to 28 form an integral part of these consolidated financial statements.
CONSOLIDATED STATEMENT OF INCOME

For the year ended 31 December 2014
Amounts in SR ’000 Note 2014 2013
Sales 7,858,516 4,436,677
Cost of sales (5,559,454) (3,710,162)
GROSS PROFIT 2,299,062 726,515
Share in earnings of jointly controlled projects, net 9 604,491 880,562
Selling and marketing expenses 18 (492,555) (310,568)
General and administrative expenses 19 (314,041) (261,541)
INCOME FROM MAIN OPERATIONS 2,096,957 1,034,968
Financial charges (172,207) (202,974)
Other income (expenses), net 20 7,409 (57,844)
INCOME BEFORE NON-CONTROLLING INTEREST AND

1,932,159 774,150
ZAKAT
Non-controlling interest share in net (income) loss of the
(871,980) 43,254
subsidiaries
INCOME BEFORE ZAKAT 1,060,179 817,404
Zakat 14 (126,846) (103,325)
NET INCOME 933,333 714,079
EARNINGS PER SHARE (SR) 21
Attributable to the income from main operations 4,66 2.30
Attributable to net income 2,07 1.59
39
40

CONSOLIDATED STATEMENT OF CASH FLOWS

Amounts in sr ’000 2014 2013
OPERATING ACTIVITIES
Income before zakat 1,060,179 817,404
Adjustments for:
Depreciation and amortization 825,865 819,419
Employees’ terminal benefits, net 12,797 7,613
Work in progress written off - 62,396
Gain from disposal of property, plant and equipment (125) -
Share in earnings of jointly controlled projects, net (604,491) (880,562)
Non-controlling interest share in net income (loss) of the subsidiaries 871,980 (43,254)
2,166,205 783,016
Changes in operating assets and liabilities:
Accounts receivable (300,590) (445,643)
Cash margins, prepayments and other current assets (27,391) (34,268)
Inventories (312,182) (501,857)
Related parties, net 64,094 67,310
Accounts payable (30,557) (46,095)
Accrued liabilities and other liabilities (1,693) 254,968
Zakat paid (54,126) (55,866)
Net cash from operating activities 1,503,760 21,565
INVESTING ACTIVITIES
Addition of property, plant and equipment (168,705) (583)
Proceeds from disposal of property, plant and equipment 125 -
Additions of investment in jointly controlled projects - (361,873)
Dividends received from a jointly controlled project 684,380 918,750
Time deposits (559,000) -
Net cash (used in) from investing activities (43,200) 556,294
FINANCING ACTIVITIES
Repayments of term loans, net (925,504) (565,040)
Sukuk 1,070,000 -
Proceeds from (repayments of ) short term loan (600,000) 600,000
Subordinated loan to jointly controlled projects (264,375) (195,000)
Board of directors’ remuneration (1,800) (1,800)
Subordinated loan from non-controlling partner in a subsidiary company - 367,500
Dividends paid (450,000) (450,000)
Net cash used in financing activities (1,171,679) (244,340)
INCREASE IN CASH AND CASH EQUIVALENTS 288,881 333,519
Cash and cash equivalents at the beginning of the year 1,509,892 1,176,373
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 1,798,773 1,509,892
NON CASH TransAction
Property, plant and equipment transferred from project under
- 860,161
construction (note 11)
41
Attributable to the shareholders’ equity
Share Statutory Retained Shareholders’ Non-controlling
Amounts in sr ’000 Total
capital reserve earnings equity total Interest
Balance as at 31 december 2012 4,500,000 362,245 1,207,389 6,069,634 3,537,570 9,607,204
Declared dividends - - )450,000( )450,000( - )450,000(

Board of directors remuneration - - )1,800( )1,800( - )1,800(
Net income for the year - - 714,079 714,079 - 714,079
Transferred to statuary reserve - 71,409 )71,409( - - -
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Non-controlling interest - - - - )43,254( )43,254(

Declared dividends (note 27) - - )450,000( )450,000( - )450,000(
Board of directors remuneration - - )1,800( )1,800( - )1,800(

Net income for the year - - 933,333 933,333 - 933,333

Transferred to statuary reserve - 93,333 )93,333( - - -
Non-controlling interest - - - - 871,980 871,980
42

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

At 31 December 2014
1. ORGANIZATION AND ACTIVITIES

Saudi Industrial Investment Group (“the Company”) is a Saudi joint stock company registered in
Riyadh, in the Kingdom of Saudi Arabia under Commercial Registration number 1010139946 dated
10 Sha’aban 1416H (corresponding to 1 January 1996).The Company was formed pursuant to the
Ministry of Commerce and Industrial’s resolution numbered 291 dated 29 Jumad Thani 1416 H (cor-
responding to 23 November 1995).
The Company is engaged in enhancing the growth and development of the industrial base of the
Kingdom, mainly the petrochemicals industry, opening more channels for the exportation of the
products and more ways for private sector in the Kingdom to enter into other industries by using
petrochemical products after obtaining the required licenses from the relevant authorities.
2. BASIS OF CONSOLIDATION
These consolidated financial statements include the financial statements of the Company and its
subsidiary (the “Group”), as adjusted by the elimination of significant inter-Group balances and
transactions.
The financial statements of the subsidiary are prepared using accounting policies which are consis-
tent with those of the Company. The financial statements of the subsidiary company are consolidat-
ed from the date on which the Company is able to exercise effective management control over the
subsidiary company. A subsidiary is an entity in which the Company has a direct or indirect equity
investment of more than 50% or over which it exercise effective management control.
Non-controlling interest in the net assets of consolidated subsidiary is identified separately from
the Company’s shareholder equity therein. Non-controlling interests consist of the amount of those
interests at the date of the original business combination and the non-controlling interest’s share of
changes in equity since the date of the combination.
The subsidiary companies are as follows:
Shareholding %
2014 2013 Country of Incorporation
National Petrochemical Company (“Petrochem”)* 50 50 Saudi Arabia
* The subsidiaries of Petrochem are as follows:
Shareholding %
2014 2013 Country of Incorporation
Saudi Polymers Company (“SPCo”) 65 65 Saudi Arabia
Gulf Polymers Distribution Company FZCO (“GPDCo”) 65 65 United Arab Emirates

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (continued)

At 31 December 2014
NATIONAL PETROCHEMICAL COMPANY (“PETROCHEM”) AND ITS SUBSIDIARIES
National Petrochemical Company (“Petrochem”) is a Saudi joint stock company registered in the
Kingdom of Saudi Arabia under commercial registration number 1010246363 dated 8 Rabi Awal
1429H (corresponding to 16 March 2008), and was formed pursuant to the ministry of commerce
and industry`s resolutions numbered 53/Q dated 16 Safar 1429H, (corresponding to 23 February
2008). Petrochem is engaged in the development, establishment, operation, management and
maintenance of petrochemical, gas, petroleum and other industrial plants, wholesale and retail trad-
ing in petrochemical materials and products, owning land, real estate and buildings for its benefits.
The subsidiaries of Petrochem are as follows:
a. Saudi Polymers Company (“SPCo”)
Is a mixed limited liability company, registered in Jubail in the Kingdom of Saudi Arabia under reg-
istration number 2055008886 dated 29 Dhu Al Qedah1428H (corresponding to 9 December 2007).
SPCo is engaged in production and sale of ethylene, propylene, hexene, gasoline, polyethylene, poly-
propylene and polystyrene. At 1 October 2012, SPCo completed its trial operation and announced
the commercial production.
SPCo plant (the “plant”) has faced certain interruption in production during 2013 due to certain
technical problems in certain production units. Further, an unscheduled disruption of production
has been announced during March 2014 for 10 days due to disruption in its feedstock supply.
b. Gulf Polymers Distribution Company (“GPDCo”)
Is a free zone limited liability company registered in the Dubai Airport Free Zone dated 12 Rabi Awal
1432 H (corresponding to 15 February 2011). GPDCo activity is restricted to selling and storing of
SPCo’s polymer products.
43
44


At 31 December 2014
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements have been prepared in accordance with accounting standards
generally accepted in the Kingdom of Saudi Arabia. The figures in these consolidated financial state-
ments are rounded to nearest thousands. The significant accounting policies adopted are as follows.
Accounting convention
The consolidated financial statements are prepared under the historical cost convention.
Use of estimates
The preparation of the consolidated financial statements in conformity with generally accepted ac-
counting principles requires the use of estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consoli-
dated financial statements and the reported amounts of revenues and expenses during the report-
ing period. Actual results may vary from these estimates.
Cash and cash equivalents

Cash and cash equivalents consists of bank balances, cash on hand, and short term deposits that are
readily convertible into known amounts of cash and have a maturity of three months or less when
placed.
Accounts receivable
Accounts receivable are stated at the invoiced amount less an allowance for any uncollectible
amounts. An estimate for doubtful debt is made when the collection of the receivable amount is
considered doubtful. Bad debts are written off as incurred.
Inventories
Inventories are stated at the lower of cost and market value. Cost is determined as follows:
Raw materials, spare parts and catalysts - purchase cost on a weighted average basis.
cost of direct materials and labour plus attribut-

Work in progress and Finished goods -
able overheads based on a normal level of activity.
Deferred charges/amortization
Deferred charges comprise agency and upfront fees on term loans and are amortized over the pe-
riod of the related loans. The amortization is capitalized in the cost of the plant under construction,
until the project is ready for its intended use, and thereafter, is charged to the interim consolidated
statement of income.
Deferred charges may include also, turnaround costs which are deferred and amortized over the
period until the date of the next planned turnaround. Should unexpected turnaround occur prior
to the previously envisaged date of planned turnaround, then the previously unamortized deferred
costs are immediately expensed and new turnaround costs are deferred and amortized over the
period likely to benefit from such costs.

At 31 December 2014
Investment in jointly controlled projects

A joint venture is a contractual arrangement whereby the Group and other parties undertake an
economic activity that is subject to joint control, i.e the strategic financial and operating policies
and decisions relating to the activities require the unanimous consent of the parties sharing control.
Joint venture arrangements that involve the establishment of a separate entity in which each party
has an interest are referred to as jointly controlled project. The Group share in the jointly controlled
project is accounted under equity method whereby the group share in the jointly controlled project
is carried in the consolidated balance sheet at cost as adjusted by post-incorporation changes in the
Company’s share in the net assets of the jointly controlled entity, less any impairment in the value of
individual investment, if any.
Property, plant and equipment / depreciation

Property, plant and equipment are stated at cost net of accumulated depreciation except for Plati-
num (precious metal) and work in progress which are stated at cost and are not depreciated. Expen-
diture for maintenance and repairs is expensed, while expenditure for improvement is capitalized.
Depreciation is provided over the estimated useful lives of the applicable assets using the straight-
line method.
The estimated useful lives for the calculation of depreciation are as follows:
Years Years
Plant and equipments 5- 25 Vehicles 4

Office equipment and
3.33-10 Buildings 20
furniture
Leasehold
5 year or the term of lease, whichever is shorter
improvements
Work in progress appears at cost until the asset is ready for its intended use, thereafter; it is capital-
ized on the related assets. Work in progress include the cost of contractors, materials, services, bor-
rowing, salaries and other direct costs and overhead allocated on systematic basis.
45
46


At 31 December 2014
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Borrowing costs
Borrowing costs that are directly attributable to the construction of an asset are capitalized up to the
stage when substantially all the activities necessary to prepare the qualifying asset for its intended
use are completed, and thereafter, is charged to the consolidated statement of income.
Impairment of assets
The Group periodically reviews the carrying amounts of its long term tangible assets to determine
whether there is any indication that those assets have suffered an impairment. If such indication ex-
ists, the recoverable amount of the asset is estimated in order to determine the extent of the impair-
ment. Where it is not possible to estimate the recoverable amount of an individual asset, the Group
estimates the recoverable amount of the cash generating unit to which the asset belongs.
If the recoverable amount of an asset or cash generating unit is estimated to be less than its carry-
ing amount, the carrying amount of the asset or cash generating unit is reduced to its recoverable
amount. Impairment is recognized in the consolidated statement of income.
Where an impairment subsequently reverses, the carrying amount of the asset or the cash generat-
ing unit is increased to the revised estimate of its recoverable amount, so that the increased carrying
amount does not exceed the carrying amount that would have been determined had no impair-
ment been recognized for the asset or cash generating unit in prior years. A reversal of impairment
is recognized as income immediately in the consolidated statement of income.
Accounts payable and accruals
Liabilities are recognized for amounts to be paid in the future for goods or services received, wheth-
er billed by the supplier or not.
Provisions
Provisions are recognized when an obligation (legal or constructive) arising from a past event, and
the costs to settle these obligation are both probable and may be measured reliably.
Zakat and income tax
Zakat is provided in accordance with the Regulations of the Department of Zakat and Income Tax
(DZIT) in the Kingdom of Saudi Arabia and on accrual basis. The provision is charged to the con-
solidated statement of income. Differences, if any, resulting from the final Zatat assessments are
adjusted in the year of their finalization. The foreign partner in Petrochem’s subsidiaries is subject to
income tax which is included in non-controlling interest in the consolidated financial statements, if
exist.

At 31 December 2014
Employees’ terminal benefits

Provision is made for amounts payable under the Saudi Arabian labour law applicable to employees’
accumulated periods of service at the consolidated balance sheet date.
Fair value
The fair value of commission-bearing items are estimated based on discounted cash flows using
commission rates for items with similar terms and risk characteristics.
Statutory reserve
In accordance with Saudi Arabian Regulations for Companies, the Company must transfer 10% of
its net income in each year to the statutory reserve. The Company may resolve to discontinue such
transfers when it builds up a reserve equal to one half of the capital. The reserve is not available for
distribution.
Dividends
Final dividends are recognized as liabilities at the time of their approval by the shareholders’ General
Assembly. Interim dividends are recorded as and when approved by the Board of Directors.
Revenue recognition
Sales represent the invoiced value of goods supplied by the Group during the year and is recognized
when the significant risks and rewards of the ownership of the goods have passed to the buyer and
the amount of revenue can be measured reliably normally on the delivery to the customer. Other
income is recognized when earned.
The Group share in the jointly controlled projects result is accounted under equity method.
Expenses
Selling and marketing expenses are those that specifically relate to delivery and marketing of the
products. All other expenses –except cost of sales- are allocated on a consistent basis to general and
administration expenses in accordance with allocation factors determined as appropriate by the
management.
47
48


At 31 December 2014
Foreign currencies
Transactions in foreign currencies are translated into Saudi Riyals at the rate prevailing at the date of
those transactions. Monetary assets and liabilities denominated in foreign currencies at the consoli-
dated balance sheet date are retranslated at the rate prevailing at that date. All differences are taken
to the consolidated statement of income.
Assets and liabilities of the consolidated subsidiaries denominated in foreign currencies are trans-
lated into Saudi Riyals at exchange rates prevailing at the consolidated balance sheet date. Revenues
and expenses of the consolidated subsidiaries denominated in foreign currencies are translated into
Saudi Riyals at average exchange rates during the year. Component of equity, other than retained
earnings, are translated at the rates prevailing at the date of their occurrence. Exchange differences
arising from such translations, if material, are included in the cumulative translation adjustment ac-
count under equity in the consolidated balance sheet.
Segment reporting
A segment is a distinguishable component of the Group that is engaged either in providing products
or services (a business segment) or in providing products or services within a particular economic
environment (a geographic segment), which is subject to risks and rewards that are different from
those of other segments. The Head Office segment incorporates the financial information related to
activities under construction.
4. CASH AND CASH EQUIVALENTS

Amounts in SR ’000 2014 2013
Bank balances and cash in hand 1,187,398 95,003
Time deposits 611,375 1,414,889
1,798,773 1,509,892
5. CASH MARGIN, PREPAYMENTS AND OTHER ASSETS

Amounts in SR ’000 2014 2013
Cash margin against letter of guarantees 52,016 77,510
Prepayments 30,018 20,679
Advances to suppliers 20,996 -
Current portion of employees loans (*) 15,148 14,158
Other assets 3,481 3,062
121,659 115,409
(*) Employees loans are commission free housing loans for eligible Saudi employees in the company
and in the subsidiary companies to purchase or construct their own residential units and are secured
by mortgage over property purchased under employees home ownership program. Such loans are
repayable in monthly installments over a maximum period of 15 years.

At 31 December 2014
6. RELATED PARTY TRANSACTIONS

The following are the details of major related party transactions during the years:
A Amounts
substantial portion
in SR ’000 of sales of Saudi Chevron Philips, Jubail Chevron Philips (jointly controlled
Amount of transactions
Related party Nature of transactions 2014 2013
Non-controlling partner in a
- 367,500
subsidiary company Proceeds from subordinated loan
Marketing fees 317,708 184,997
Board of directors, committees and Expenses, remunerations, salaries

8,527 8,079
senior executives and benefits
Affiliate companies Services provided 673,835 600,101
Sales 472,090 492,864
Purchases (1,418,644) (1,037,914)
projects) and GPDCo were made through an affiliated company of the non-controlling partner (the
Marketer”) under a marketing agreement. Upon delivery of the product to the Marketer, sales are
recorded at provisional prices. The provisional prices are subsequently adjusted to actual selling
prices as received by the Marketer from its customers. Adjustments are recorded on a quarterly basis
as they are reported by the Marketer. The prices and terms of the transactions are approved by the
management of the companies.
Amounts due from / to related parties are shown in the consolidated balance sheet.
7. INVENTORIES
Amounts in SR ’000 2014 2013
Finished goods 747,888 598,954
Spare parts 303,900 150,019
Raw material 133,718 141,893
Catalyst 57,633 40,091
1,243,139 930,957
49
50


At 31 December 2014
8. DEFERRED CHARGES
Deferred charges consists of agency and upfront fees on the term loan and amortized over the pe-
riod of the related loans, as follow:
Amounts in SR ’000 2014 2013
Cost
At the beginning and ending of the year 238,369 238,369
Amortization
At the beginning of the year 163,583 131,186
Charged as expenses during the year 23,318 32,397
At the end of the year 186,901 163,583
Net book value 51,468 74,786
9. INVESTMENTS IN JOINTLY CONTROLLED PROJECTS

These comprises the Company’s investments in the following companies which are incorporated as
limited liability companies and operating in the Kingdom of Saudi Arabia:
Joint venture Shareholding %
Saudi Chevron Philips Company (“SCP”) 50%
Jubail Chevron Philips Company (“JCP”) 50%
Petrochemical Conversion Company (“PCC”) (*) 50%
(*) During the year, the Group has announced the commencing of operation of some plants of the
project.
The following summarize the investments movement during the year ended at 31 December:
Amounts in SR ’000 2014 2013
At the beginning of the year 3,233,928 2,910,243
Share of income 604,491 880,562
Addition - 361,873
Dividends (684,380) (918,750)
At the end of the year 3,154,039 3,233,928
10. SUBORDINATED LOANS TO JOINTLY-CONTROLLED PROJECTS

It represents the company’s contribution of free commission loans for projects managed jointly by
the partners according to their ownership shares. Loan repayment is not subject to commission.
Subordinated loans balance at 31 December were as following:
(Amounts in SR ’000) 2014 2013
Petrochemical Conversion Company 459,375 195,000
Jubail Chevron Philips Company 75,000 75,000
534,375 270,000
51
11. PROPERTY, PLANT AND EQUIPMENT
Furniture and
Plant & Leasehold Work in Total Total
Amounts in SR ’000 Buildings office equip- Platinum Vehicle
equipment improvement Progress(*) 2014 2013
ment
Cost:
At the beginning of the year 18,473,343 679,954 143,862 24,462 29,971 1,048 - 19,352,640 18,491,896
Additions 60,623 - 1,873 - 1,985 - 104,224 168,705 583

Transferred from work in

- - - - - - - - 860,161
progress
Disposal - - - - (1,436) - - (1,436) -
At the end of the year 18,533,966 679,954 145,735 24,462 30,520 1,048 104,224 19,519,909 19,352,640
Depreciation:
At the beginning of the year 902,470 33,810 37,070 - 8,680 1,031 - 983,061 196,039
Charge for the year 740,784 27,203 28,456 - 6,087 17 - 802,547 787,022
Disposal - - - - (1,436) - - (1,436) -
At the end of the year 1,643,254 61,013 65,526 - 13,331 1,048 - 1,784,172 983,061
Net book amounts:

At 31 December 2014 16,890,712 618,941 80,209 24,462 17,189 - 104,224 17,735,737
At 31 December 2014
At 31 December 2013 17,570,873 646,144 106,792 24,462 21,291 17 - 18,369,579

The buildings are situated on lands leased from the Royal Commission for Jubail and Yanbu, for an initial period of 30 years and are renewable for further
similar periods.
The machinery and equipment of the plant are pledged as collaterals against loan facilities (note 13).
(*) As of 31 December 2014, work in progress balance comprises cost of the construction of additional units and facilities for the Plant.
52


At 31 December 2014
12. ACCRUED LIABILITIES AND OTHER LIABILITIES

Amounts in SR ’000 2014 2013
Accrued liabilities 327,885 339,073
Dividends 10,492 10,233
Compensation for priority rights subscription 3,187 3,187
Other liabilities 37,859 28,623
379,423 381,116
13. TERM LOANS
Term loans represent the outstanding balances from the loan facilities obtained from the following
parties to finance the construction work of the plant:
Outstanding Balance
Amounts in SR ’000 Value 2014 2013
Commercial banks syndication 7,054,875 6,270,831 6,693,585
Public Investment Fund 3,000,000 1,947,000 2,970,000
Commercial banks syndication - Guarantee 2,212,500 2,730,000 2,079,750
Saudi Industrial Development Fund 1,200,000 1,020,000 1,150,000
11,967,831 12,893,335
Less: current portion of term loans
Commercial banks syndication 422,753 422,754
Public Investment Fund 132,750 240,000
Commercial banks syndication - Guarantee 420,000 132,750
Saudi Industrial Development Fund 170,000 130,000
Current portion of term loans 1,145,503 925,504
Long term portion of term loans 10,822,328 11,967,831
The securities of these loans include the pledging and assignment of the property and equipment
and bank accounts of the related projects and Petrochem. These loans carry commission at normal
commercial rates for loans with similar risks. The Borrowing Company are required to comply with
certain covenants under all the loan facility agreements.

At 31 December 2014
14. ZAKAT
Charge for the year
Zakat charge for the year amounting to SR 126.8 million (2013: SR 103.3 million) consists of provision
for the current year and as follows:
Amounts in SR ’000 2014 2013
For the Subsidiary and jointly controlled projects 98,730 74,699
For the Company 28,116 28,626
126,846 103,325
Movements in provision during the year

The movement in the zakat provision for the year was as follows:
Amounts in SR ’000 2014 2013
At the beginning of the year 176,635 129,176
Provided during the year 126,846 103,325
Paid during the year (54,126) (55,866)
At the end of the year 249,355 176,635
Status of assessments
The company has filed zakat returns with the Department of Zakat and Income Tax (“DZIT”) for all
prior years up to 2013. The DZIT has raised the zakat assessments up to 2006 and the Company has
agreed on DZIT`s assessments up to 2001. The Company has filed an appeal against the assessments
for the years 2002 and 2003 before Higher Appeal Committee against certain items disallowed by
DZIT which resulted in a difference of SR 24.4 million. The Higher Appeal Committee issued its ruling,
reducing the claim amount to SR 12.4 million and the company has filed an appeal against the ruling
before the Board of Grievances. Also the company appealed before The Preliminary Appeal Com-
mittee against zakat assessments for the years 2004 to 2006 against disallowance of certain items
which resulted in a difference of SR 17.5 million, The Committee issued its ruling, reducing the claim
to SR 16.8 M. The Company has paid the amount of SR 5.7 million and appealed before the Higher
Appeal Committee against the amount of SR 11.1 million. As per the management’s assessment, the
Company has made adequate provision against items under appeals.
53
54


At 31 December 2014
As For Petrochem, Zakat returns have been filed with the Department of Zakat & Income Tax (DZIT)
for all prior years up to 2013, and zakat was settled accordingly. The DZIT has raised zakat assess-
ment for the year 2008 which resulted a difference of SR 53 million. The Higher Appeal Committee
has issued its ruling during the current year in the favor of Petrochem.
Petrochem and its zakat consultant have filed an appeal against the claim for the year 2010 which
resulted in a difference of SR 74.42 million. The Committee has issued its ruling, reducing the claim
by the amount of SR 74.10 million. The Company and DZIT appealed against the ruling before The
Higher Appeal Committee. The management believes that the ultimate outcome of this appeal will
be in the favor of Petrochem.
Also Petrochem and its zakat consultant have filed an appeal against the claim for the year 2012
which resulted in a difference of SR 35 million. The management believes that the provision made is
adequate to cover any differences that may arise from this claim.
As for SPCo, zakat returns have been filed with the DZIT for previous years up to 2013. The DZIT has
raised the zakat assessment for 2008. Final assessments for the years from 2009 to 2013 have not
been raised yet by DZIT.
As for GPDCo, the company registered in Dubai Airport Free Zone, and is exempted from income tax.
15. SUKUK
On 25 Shaban 1435H, (corresponding to 23 June 2014), Petrochem (a subsidiary) issued Sukuk
amounting to SR 1.2 billion at a par value of SR 1,000,000 each with no discount or premium. The
Sukuk issuance bears a variable rate of return at (SIBOR) plus 1.7% margin, payable semi-annually.
The Sukuk is due at maturity at par value on its expiry date of 20 Shawal 1440 H (corresponding 23
June 2019).
Sukuk balance of SR 1,070 million in these consolidated financial statements represents issued Su-
kuk value after eliminating the value of the Group investment in these Sukuk.
16. SUBORDINATED LOAN FROM A NON-CONTROLLING PARTNER IN A

SUBSIDIARY
Subordinated loan from a non-controlling partner is commission free loan granted to SPCo, and
its repayment is subject to the minimum level required to be maintained by the terms of the loan
facility agreements. The movement of the subordinated loan during the year is analyzed as follows:
Amounts in SR ’000 2014 2013
At the beginning of the year 1,131,797 764,297
Proceeds received - 367,500
1,131,797 1,131,797

At 31 December 2014
17. SHARE CAPITAL

Share capital is divided into 450 million shares (2013: 450 million shares) of SR 10 each.
18. SELLING AND MARKETTING EXPENSES

Amounts in SR ’000 2014 2013
Marketing fees (note 6) 317,708 184,997
Warehouses rent and maintenance 94,060 88,774
Distribution and freights 43,235 26,131
Currency exchange 27,133 (8,090)
Employees costs 7,065 6,799
Others 3,354 11,957
492,555 310,568
19. GENERAL AND ADMINSTRATIVE EXPENSES

Amounts in SR ’000 2014 2013
Employees costs 188,983 155,633
Depreciation 66,657 65,629
Consulting and professional fees 11,267 4,531
Bank Charges 7,964 2,645

Expenses and remuneration of board of directors and 6,267 6,013
committees, salaries and benefits of senior executives
Technical and support services 3,416 3,400
Others 29,487 23,690
314,041 261,541
55
56


At 31 December 2014
20. OTHER INCOME (EXPENSES), NET
Amounts in SR ’000) 2014 2013
Income from bank deposits 7,168 4,070
Work in progress written off (*) - (62,396)
Others 241 482
7,409 (57,844)
(*)This amount related to studies of certain conversion projects which have been written off by the
management because they are not viable and have no future benefits.
21. EARNINGS PER SHARE

Earnings per share are calculated by dividing income from main operations and net income by the
number of outstanding shares amounting to 450 million shares (2013: 450 million shares).
22. SEGMENT INFORMATION

These are attributable to the business segment prepared by management to be used as a basis for
the financial reporting and are in consistent with the internal reporting process.
The Group’s operations consist from the following business segments:
Saudi Chevron Philips Company

Engaged in produce and sell aromatics, solvents and cyclohexane.
(“SCP”)
Engaged in manufacturing and selling styrene, mogas blend stock, aromatic

Jubail Chevron Philips Company
benzene, fuel oil, ethyl benzene, ethylene, propylene, liquefied petroleum gas and
(“JCP”)
aromax feed.
Engaged in the development, establishment, operation, management and

Petrochem maintenance of petrochemical, gas, petroleum and other industrial plants,
wholesale and retail trading in petrochemical materials and products.
Petrochemical Conversion Company (“PCC”)
Petrochemical Conversion
Engaged in nylon 6.6 production, nylon compounds, and other by-products.
Company (“PCC”)
Head office Represents Head Office operation and related activities under construction.
57
Elimination and
reconciliation
Amounts in SR ’000 SCP JCP Petrochem PCC Head office Total
of financial
statements
Sales - - 7,858,516 - - - 7,858,516
Gross margin - - 2,299,062 - - - 2,299,062

Net income (loss) 567,407 65,174 774,451 (28,090) (58,387) (387,222) 933,333
Total assets 1,038,283 1,209,374 21,996,850 906,383 6,931,274 (5,731,832) 26,350,332
Total liabilities - - 15,182,924 - 117,827 (130,161) 15,170,590
Elimination and
reconciliation
Amounts in SR ’000 SCP JCP Petrochem PCC Head office Total
of financial
statements
Sales - - 4,436,677 - - - 4,436,677
Gross margin - - 726,515 - - - 726,515

Net income (loss) 692,245 199,908 (66,128) (11,591) (133,419) 33,064 714,079
At 31 December 2014
Total assets 1,155,255 1,144,201 21,005,725 934,472 6,454,041 (5,319,625) 25,374,069

Total liabilities - - 15,451,007 - 122,125 (25,292) 15,547,840
All of the operational assets of the Group are located in the Kingdom of Saudi Arabia. The sales of the Group are geographically distributed among
local sales by 9% (2013: 4%), Asia 57% (2013: 67%) and Europe and Africa by 34% (2013: 29%).
58


At 31 December 2014
23. CONTINGENT LIABILITIES

During the normal course of business, the local bankers have issued, on behalf of the company and
its subsidiary, bank guarantees amounted to SR 2.6 billion, which include the amount of SR 860
million provided from SPCo to the benefit of Saudi Aramco Company for feedstock cost as of 31
December 2014 and 2013.
24. CAPITAL COMMITMENTS

The balance of unused capital expenditure approved by the board of directors in connection with
the construction of the additional units and facilities for Saudi Polymers plant was SR 332 million
(2013: SR 271.9 million).
25. RISK MANAGEMENT

Commission rate risk
Commission rate risk is the risk that the value of financial instruments will fluctuate due to changes
in the market commission rates. The Group is subject to commission rate risk on commission bearing
assets and liabilities, including time deposits, term loans and Sukuk.
Currency risk
Currency risk is the risk that the value of financial instruments will fluctuate due to changes in for-
eign exchange rates. The Group did not undertake significant transactions in currencies other than
Saudi Riyal, Euros and US Dollars during the year. As the Saudi Riyal is pegged to US Dollar, the Group
is not exposed to significant currency risk.
Credit risk
Credit risk is the risk that one party will fail to discharge an obligation and will cause the other party
to incur a financial loss. The Group seeks to limit its credit risk with respect to customers by setting
credit limits for individual customers and constantly monitoring outstanding receivables balances.
As the balance sheet date, no significant concentration of credit risk where identified by manage-
ment
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in raising funds to meet commit-
ments associated with financial instruments. The Group manages their liquidity risk by ensuring the
availability of bank facilities and monitoring cash flows in a regular basis. The Group’s terms of sales
require amounts to be paid within 7 to 90 days of the date of sale. Trade payables are normally
settled within 30 to 45 days of the date of purchase.
26. FAIR VALUES OF FINANCIAL INSTRUMENTS

Fair value is the amount for which an asset could be exchanged, or a liability settled between knowl-
edgeable willing parties in an arm’s length transaction. The Group’s financial assets consist of cash
and cash equivalents, trade receivables, cash margins, prepayments and other receivables, time de-
posits and its financial liabilities consist of trade payables, accrued liabilities, other liabilities, term
loans, Sukuk and subordinated loan from a non-controlling partner. The fair values of financial in-
struments are not materially different from their carrying values.

At 31 December 2014
27. APPROVAL OF CONSOLIDATED FINANCIAL STATEMENTS AND DIS-

TRIBUTION OF NET INCOME
On 14 Safar 1435H (corresponding to 17 December 2013) the board of directors recommended the
general assembly to distribute cash dividends at 10% of the par value of share (SR 1 per share) for the
year ended 2013, with total dividends of SR 450 million.
The shareholders have approved this proposal during the general assembly dated 1 Rajab 1435H
(corresponding to 30 April 2014).
On 26 Safar 1436H (corresponding to 18 December 2014) the board of directors recommended the
general assembly to distribute cash dividends at 10% of the par value of share (SR 1 per share) for the
year ended 2014, with total dividends of SR 450 million.
The consolidated financial statements have been approved by the board of directors on 4 Jumada
Al-Awal 1436H (Corresponding to 23 February 2015).
28. COMPARATIVE FIGURES

Certain of the prior period amounts have been reclassified to conform with the presentation in the
current period.
59
www.siig.com.sa
P.B. 99833 Riyadh 11625
Kingdom of Saudi Arabia
Tel: +966 (11) 279 2522
Fax: +966 (11) 279 2523
info@siig.com.sa
Z company 477 00 33

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Annual report

8 First: The SIIG Establishment

Second: SIIG’s Projects 9

Third: The Related Risks to the

Fourth: The Company’s 16

18 Fifth: Dividends’ Policy

Sixth: Loans and Debt

22 Seventh: The SIIG’s

Eighth: Due Regular Payments 28

Ninth: Transactions with

Tenth: Corporate Governance 30

31 Eleventh: General Disclosures

His Royal Highness His Royal Highness

The Board of Directors’ Report

His Excellency Mr. Hamad bin Saud Al-Sayari

First: The SIIG Establishment and Activities:

2. Jubail Chevron Phillips Company (JCP):

Dollar / Ton 2013 2014

The Saudi Polymers Company (SPCo):

Product Production amount (one thousand tons)

GPPS polystyrene 100

HIPS polystyrene 100

4. Petrochemical Conversion Company (PCC):

HDPE pipes 30 Infrastructure and construction pipes

Drip Irrigation 30 Irrigation pipes and their accessories

Automotive small parts 4 Fans, internal mirrors

Automotive under hood parts 15 Plastic engine covers

Electrical Fittings 10 Conductors, cables and switches

Medical Specialties 4 Medical containers

Pharmaceutical Packaging 5 Plastic bags

Caps & Closures 20 Caps & Closures

Propylene 150 KTA

Polystyrene HIPS 100 KTA

Polystyrene GPPS 100 KTA

Polyethylene 1100 KTA

Polypropylene 400 KTA Propane

Third: The Related Risks to the main SIIG’s business:

Fourth: The Company’s Financial Results:

Applied accounting policy Equity method Proportionate Consolidation

Current assets 4,825.0 3,411.2 2,118.2 3,739.9 4,601.3 4,598.6

Non-current assets 21,525.3 21,962.8 22,350.1 22,496.5 21,067.0 19,075.7

Total assets 26,350.3 25,374.0 24,468.3 26,236.4 25,668.3 23,674.3

Current liabilities 2,111.6 2,426.1 1,189.1 2,051.5 966.7 895.4

Non-current liabilities 13,059.0 13,121.7 13,672.0 14,577.7 14,728.1 13,064.2

Total liabilities 15,170.6 15,547.8 14,861.1 16,629.2 15,694.8 13,959.6

Total Shareholders’ equity 11,179.7 9,826.2 9,607.2 9,607.2 9,973.5 9,714.7

(Income Statement) in millions of 2014 2013 2012* 2012* 2011 2010

Sales 7,858.5 4,436.6 857.9 5,556.0 4,476.0 3,265.6

Cost of Revenues (5,559.5) (3,710.1) (1,336.7) (5,036.2) (3,693.7) (2,621.6)

Total profit (loss) 2,299.0 726.5 (478.8) 519.8 782.3 644.0

Company’s share in the common ad- 604.5 880.5 825.5 - - -

Financial charges (172.2) (202.9) (21.9) (40.4) (20.7) (21.4)

Income before zakat 1,060.1 817.4 630.8 630.8 635.8 514.3

Zakat (126.8) (103.3) (92.1) (92.1) (107.3) (109.7)

Net income 933.3 714.1 538.7 538.7 528.5 404.6

b. Fundamental differences in the operational results of the previous year’s results:

Total revenues 2,299.0 726.5 1,572.5 216%

Operational profits 2,096.9 1,034.9 1,062.0 103%

Net profits 933.3 714.1 219.2 31%

of Petrochem’s project (SPCo).

Fifth: Dividends’ Policy:

after deducting all general expenditures and other costs as follows:

1. Retaining provision for zakat.

when the reserve reaches half the capital value.