CORPORATE GOVERNANCE. Name of Director / Entity Represented

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1 CORPORATE GOVERNANCE In accordance with the Capital Market Authority (CMA) guidelines, we are pleased to present the Corporate Governance Report for the year ended 31 December The Auditors, Ernst & Young, have issued a separate Report on the Corporate Governance. 1. COMPANY S PHILOSOPHY Taageer s philosophy of corporate governance is aimed at promoting trusteeship, transparency, empowerment, control and ethical corporate citizenship. Taageer is committed to working with its stakeholders to improve the economic development. We strive to achieve this by implementing corporate governance in compliance within guidelines set by the Central Bank of Oman and the Capital Market Authority. 2. THE BOARD OF DIRECTORS The present Board of s were appointed in the Annual General Meeting held on 26 March 2012 for a period of three years. The Board of s has formed two Committees namely, The Audit Committee and The Executive Committee. The erstwhile Credit Committee and HR & Compensation Committee were merged with the Executive Committee during the year Composition of the Board of s: (in accordance with Article 1 of Code of Corporate Governance) Name of / Entity Represented Engr. Ahmed Hamed Al Subhi Oman Investment & Finance Co. SAOG Engr. Fahad Al Ahmadi The Arab Investment Company (TAIC), Saudi Arabia Mr. Mehdi Mohammed Jawad Al Abduwani, Al Anwar International Investment LLC, Oman Mr. Ali Ziraknejad Iran Foreign Investment Company, Iran Mr. Saleh bin Nasser Al Riyami Representing Self Independent & Non-Executive Brig. Saif Salim Saif Al Harthi Ministry of Defence, Pension Fund, Oman Mr. Reji Joseph Representing Al Anwar Holdings SAOG, Oman Mr. Qaboos Abdulla Mohamed Al Khonji Oman Investment & Finance Co. SAOG, Oman Mr. Said Ahmed Safrar Oman Investment & Finance Co. SAOG, Oman Mr. Hussain Mohamed Redha Representing Self Independent & Non-Executive Position (nominated w.e.f 20 November Vice (acting from 21 October 2014 to 19 November Ex- (resigned on 20 October (resigned on 20 October (resigned on 25 February (nominated with effect from 25 February (resigned on 10 April (elected w.e.f 21 May Board of s held 5 meetings during the year. The details of members participation in the meetings along with their ships in other companies in Oman are as follows:

2 Name of the Mr. Mehdi Mohammed Jawad Al Abduwani Engr. Ahmed Hamed Al Subhi Board Position Meeting attended 4 & 2 Whether attended last AGM Yes No ships in other Companies Computer Stationery Industry Al Anwar Holdings Oman Telecommunications Oman Investment Finance Company Voltamp Energy Position in other Company Engr. Fahad Al Ahmadi Vice 5 Mr. Ali Ziraknejad 5 Mr. Saleh bin Nasser Al Riyami 5 Brig. Saif Salim Saif Al Harthi 4 Mr. Reji Joseph 4 Mr. Qaboos Abdulla Mohamed Al Khonji 1 No Yes Yes Oman Ceramic Co. Al Madina Insurance Co. (SAOC) Vice- Yes Yes Yes Oman Hotel & Tourism Co. Al Anwar Holdings Deputy Mr. Said Ahmed Safrar NiL No Mr. Hussain Mohamed Redha 3 Not applicable National Life & General Insurance Company (SAOC)

3 3. AUDIT COMMITTEE The main role of the Audit Committee is to: Assist the Board in assuring the integrity and credibility of the financial reporting process; Review the company s internal financial controls and the company s internal control and risk management systems; Monitor and review the effectiveness of the company s internal audit function; Selecting and evaluating the External Auditors. During the year 2014, the company appointed Grant Thornton to conduct the Internal Audit of the company along with an in-house Internal Auditor. The Internal Audit work plan is drawn up in consultation with the Audit Committee. Internal Audit is done on a quarterly basis and a report is submitted to the Audit Committee for their review. The of the Audit Committee presents to the Board the proceedings of the Audit Committee meeting. The audit covers areas of operations of the company as per the approved internal audit work plan. The Management has responded to the various issues raised by the Internal Auditor and submits a compliance report on the same. The Audit Committee comprises of three Board members. Audit Committee held four meetings during the year. Details of the members and their attendance in the meetings held are as follows: Name of the Position Meetings Date of appointment attended Mr. Ali Ziraknejad 4 29 March 2009 Brig. Saif Salim Saif Al Harthi Member 4 29 March 2009 Mr. Qaboos Abdulla Mohamed Al Khonji Member 1 24 January 2012 (resigned on 25 February Mr. Hussain Mohamed Redha Member 1 22 July EXECUTIVE COMMITTEE The Executive Committee comprises of four Board members. The main role of the Executive Committee is to; Review, recommend and approve / reject credit proposals within specified financial limits; Review and recommend the annual budget to the BOD for its approval; Review company s monthly management accounts, its performance vs budget, financial management and operations of the company and recommend to the BOD appropriate action on the issues arising there from; Recommend appointment / replacement of senior management of the company (other than CEO, COO and Head of Internal Audit), review compensation related matters recommended by the management and accord approval (within the overall budget sanctioned by the Board).

4 Executive Committee held three meetings during year. Details of present members and their attendance in the meeting held are as follows: Name of the Position Meetings Attended Date of Appointment Engr. Ahmed Hamed Al Subhi Nil 22 July 2014 Mr. Mehdi Mohammed Jawad Al Abduwani Ex July 2013 (resigned on 20 October Engr. Fahad Al Ahmadi Member & 3 29 March 2009 Acting Mr. Saleh bin Nasser Al Riyami Member 3 29 March 2009 Mr. Reji Joseph Member 2 24 January 2012 (resigned on 20 October 5. REMUNERATION MATTERS The Board of s has recommended s remuneration of RO 39,000 for the year 2014 (2013 RO 45,500) in line with the provisions of Article 101 of the Commercial Companies Law of 1974, as per the requirements of Capital Market Authority. The Board was paid sitting fees as per details given herein under as approved in the last AGM held on 24 March In the case of institutional representatives on the board, payment of sitting fees have been made to the or directly to the institution whose nominee is represented on the Board as per the instruction from the or decision of the institution. The Company held 5 Board meetings during 2014, and RO 49,000 ( RO, 53,500) has been paid towards s sitting fees. During 2014, 4 Audit Committee meetings were held and RO 10,000 (2013 RO 11,000) was paid towards Audit Committee sitting fees. During 2014, 3 Executive Committee meetings were held and RO 10,000 (2013 RO 7,500) was paid towards Executive Committee sitting fees. During the year RO 384,728 (2013 RO 274,453) was paid as salary and related benefits to the five senior most officers of the company. Employment contracts with these officers are in accordance with the labour laws of the Sultanate of Oman. 6. PROCESS OF NOMINATION OF THE DIRECTORS The company follows the provisions of the Commercial Companies Law and the guidelines from the Central Bank of Oman in respect of nomination of the members of the Board of s. 7. MEANS OF COMMUNICATION WITH THE SHAREHOLDERS The Company publishes quarterly accounts in two national newspapers and also submits the same to the Muscat Securities Market. Annual report is mailed to all the Shareholders. And other relevant information at its website ( and Muscat Securities Market (MSM) website (

5 8. MARKET PRICE DATA a. High/Low price and index The shares of the company are listed on the Muscat Securities Market. Details of market price data during 2014 are as follows: Month Market Price Volume Index (RO) Traded High Low MSM Sector Jan ,849,641 7,094 8,497 Feb ,790,675 7,131 8,483 Mar ,423,043 7,019 8,238 Apr ,600 6,800 8,112 May ,681 6,764 8,032 Jun ,722 6,927 8,369 Jul ,060,854 7,146 8,752 Aug ,886,441 7,329 8,920 Sep ,532 7,479 9,301 Oct ,406,782 7,091 8,597 Nov ,959 6,973 8,382 Dec ,516 6,138 7,430 b. Distribution of shares Name of the shareholders (holding more than 5%) Percentage (%) No. of shares Oman Investment Fund ,287,298 The Arab Investment Co. SAA ,637,994 Iran Foreign Investment Co ,685,320 Oman Investment & Finance Co. SAOG ,496, STATUTORY AUDITORS EY is the statutory auditors of the Company. EY has been operating in the Sultanate of Oman since 1974 and is the largest professional services firm in the country. EY Oman, forms part of EY s EMEIA practice, with 4,015 partners and over 90,500 professionals in 462 offices throughout the EMEIA geographical area. Globally, EY operates in more than 150 countries and employs 190,000 professionals. 10. AUDIT FEES During the year 2014, an amount of RO 7,500 has been paid to the statutory auditors or is due to them. 11. NON-COMPLIANCE Taageer is not aware of any non-compliance with the law, regulation, or any other requirement of a statutory authority, nor has it been subject to penalty for any breach as on 31December 2014.

6 12. CORPORATE SOCIAL RESPONSIBILITY Taageer is committed to shoulder its financial responsibility in social sphere. During the financial year 2014, Taageer has contributed sums aggregating to RO 5,474 to associations engaged in promoting welfare of the Disabled, Elderly Friends, Blind, Diabetic and in spreading cancer awareness. 13. ACKNOWLEDGEMENT The Board of s acknowledges confirmation of: Its responsibility for the preparation of the financial statements in accordance with the applicable standards and rules; Review of the efficiency and adequacy of internal control systems of the Company and that it complies with internal rules and regulations; There are no material matters that affect the continuation of the Company and its ability to continue its operations during the next financial year.