NAWRAS CORPORATE GOVERNANCE MANUAL
Intrductin Definitins f Terms Used in this Manual CONTENTS I. Crprate Gvernance at Nawras What Crprate Gvernance is and why it is imprtant Nawras Values and Crprate Gvernance Philsphy Hw t use this Manual Questins and Reprting Cncerns II. III. IV. Nawras Gvernance Framewrk Laws and Plicies Gverning the Cmpany The Bard f Directrs Rle f the Bard The Bard s Respnsibilities and Duties Bard Cmpsitin Chairman f the Bard Bard Secretary Bard Meetings Qurum and Prxies Reslutins Bard Cmmittees Directr Orientatin and Cntinuing Educatin Bard Perfrmance Evaluatin Certificatin f Cmpliance Crprate Indemnity and D&O Insurance Management Functin Executive Officers Management Cmmittees Internal Audit Functin External Auditrs Office f Crprate Gvernance Nawras Gvernance Officer Appendices A. Nawras Articles f Assciatin B. Nawras Cde f Ethics and Cnduct C. Bard f Directrs Cde f Ethics and Cnduct and Annual Certificatin D. Rules fr Related Party Transactins E. Annual Reprt n Crprate Gvernance F. Bard Cmmittee Charters G. Management Cmmittee Charters H. Internal Audit Charter I. Prcurement Plicy J. Peple Plicy Bard Apprved 24 January 2010
Intrductin Nawras is cmmitted t prviding quality telecmmunicatins services t ur custmers, perating ur business in a scially respnsible manner, and being an integral cntributr t Omani sciety. Nawras firmly believes that adhering t sund crprate gvernance principles plays a significant rle in enhancing a cmpany s glbal perfrmance and prmting investr cnfidence, thus helping t create and maintain sharehlder value. Fr any cmpany t adhere t strng business practice principles and ethical behaviur requires cmmitment, bjectivity and accuntability frm everyne, nt just thse in leadership psitins. Accrdingly, it is the duty f all Nawras emplyees t infrm themselves abut the Cmpany s gvernance principles and plicies and t put them int practice in their daily wrk. This Crprate Gvernance Manual aims t help emplyees fulfil that duty. It sets ut Nawras philsphy and plicies with respect t respnsible, effective versight and management, reliable internal cntrls, ethical behaviur f all persnnel, disclsure f infrmatin, and prtectin f sharehlder rights. Bard Apprved 24 January 2010
Definitins f Terms Used in this Manual Unless therwise nted in this Manual, the fllwing definitins apply t several key terms that appear thrughut this Manual: Annual General Meeting: The meeting f Nawras sharehlders held nce a year within three mnths after the end f the Cmpany s financial year 1. Als referred t as the Ordinary General Meeting r the AGM. Bard: The Nawras Bard f Directrs. Charter: The main funding dcument r cnstitutin f an rganisatin r cmmittee, setting frth its missin statement, gals, rganisatinal structure and peratinal prcedures. Cmpany: Omani Qatari Telecmmunicatins Cmpany SAOC, knwn as Nawras. CMA: The Oman Capital Market Authrity, the gvernment authrity respnsible fr rganising and verseeing the issue and trading f securities in the Sultanate f Oman. Crprate Gvernance: The system by which a cmpany is directed and managed, including the structure, rules and plicies fr making decisins cncerning crprate affairs and achieving the bjectives f an rganisatin. Directr: A member f the Nawras Bard f Directrs. See als Nn-Executive Directr. MSM: Muscat Security Market, the exchange n which listed securities trade in Oman. Nn-Executive Directrs: Bard members wh are nt regular emplyees f a cmpany and/r d nt draw any fixed mnthly r annual salary frm the cmpany. Qtel: Qatar Telecm QSC, a telecmmunicatins prvider in Qatar and a Nawras sharehlder, via its investment in TDC-Qtel MENA Investcm BSC. Related Party: Under CMA regulatins, Related Party includes any f the fllwing: (1) Any persn wh was a directr during the last twelve (12) mnths in the Cmpany, parent f the Cmpany, r subsidiary f the Cmpany (2) The CEO r any emplyee reprting directly t the Bard (3) Any persn wh hlds r cntrls 10% r mre f the vting pwer f the Cmpany r its subsidiary, parent, r fellw subsidiary undertaking f its parent undertaking (4) Any persn wh is an assciate f any natural persn under items 1, 2 r 3 abve, with assciate including parents, children, spuses and business entities wherein 25% r mre f the vting pwer is cntrlled cllectively r individually, r (5) Any persn wh is an assciate f any juristic persn 2 as mentined under 1, 2 and 3 abve, with assciate including parent cmpany, subsidiaries, fellw subsidiaries and business entities in which the crprate entity cntrls 25% r mre f the vting pwer. It shall als include cmpanies in which the majrity f its directrs act in accrdance with the wishes f the cncerned cmpany. 1 Cmmercial Cmpanies Law RD 4/74 Article 120 2 Other than jint ventures, all cmmercial cmpanies are cnsidered juristic persns under the Oman Cmmercial Cmpanies Law. Bard Apprved 24 January 2010
Sharehlders: The individuals r cmpanies that wn shares in Nawras. Stakehlder: A persn, grup, rganisatin, r system that affects r can be affected by an rganisatin's actins. A cmpany s stakehlders can include sharehlders, investrs, custmers, creditrs, emplyees, cmmunities and gvernments. Bard Apprved 24 January 2010
I. CORPORATE GOVERNANCE AT NAWRAS A. What is Crprate Gvernance and why is it imprtant Crprate gvernance is the system by which a cmpany is directed and managed. It cmprises the structure, rules and plicies fr making decisins cncerning crprate affairs and achieving the bjectives f an rganisatin. It cvers the entire management and cntrl f a cmpany, including its rganisatinal structure, business plicy, principles and guidelines, internal and external plicies and mnitring mechanisms, as well as the relatinships between its bard f directrs, executive management, emplyees and varius stakehlders. Successful crprate gvernance practices aspire t psitively influence emplyee behaviur and perfrmance s as t ptimise accuntability, transparency and efficiency in ways that meet the changing circumstances f the cmpany and maintain investr cnfidence. What cnstitutes gd gvernance is nt a fixed target but a matter f cnstant evlutin, which requires gvernance plicies t cntinually evlve. Fr Nawras, the plicies and practices that are described in this Manual shuld be fllwed and enfrced because gd gvernance practices imprve hw a cmpany functins and can have a significant psitive effect n hw it prspers. Equally imprtant, gd gvernance is necessary in rder fr Nawras t be respnsive t ur legal bligatins, ur duty t sharehlders, and ur values and principles. B. Nawras Values and Crprate Gvernance Philsphy The Nawras Bard and management believe that gd crprate gvernance practices cntribute t the creatin, maintenance and increase f sharehlder value. Sund crprate gvernance principles are the fundatin upn which investr and cmmunity trust is built and are critical t grwing a cmpany s reputatin fr its dedicatin t excellence and integrity. C. Hw t Use this Manual This Manual cvers a wide range f imprtant gvernance issues. The table f cntents will guide yu t a particular tpic, r yu may use the search functin in an electrnic cpy t lcate key wrds r phrases. Hwever, all Bard members, executives and emplyees shuld read this Manual in its entirety and revisit it peridically t stay apprised f its cntents. This Manual will be updated regularly, and the latest cpy will be psted n the Cmpany s intranet and als available thrugh the Legal Department. D. Questins and Reprting Cncerns If yu have questins abut the meaning r applicability f any f the cntents f this Manual, please cntact yur immediate supervisr r a member f the Legal Team. Similarly, if yu have a cncern abut the cnduct f the Cmpany r any f its fficers, Bard members r emplyees, r abut the Cmpany s accunting, internal accunting cntrls r auditing matters, cntact yur supervisr r a member f the Legal Team. Please nte that the Cmpany will nt retaliate r threaten t retaliate against any emplyee wh, in gd faith, reprts a pssible vilatin f this Crprate Gvernance Bard Apprved 24 January 2010
Manual including the assciated Cde f Ethics and Cnduct, r wh cperates with any investigatin f such a reprt, whether r nt it is determined that an actual vilatin has ccurred. Bard Apprved 24 January 2010
II. NAWRAS GOVERNANCE FRAMEWORK N single law r dcument gverns all aspects f a cmpany. A number f authrities, including laws created by the jurisdictin(s) in which a given cmpany perates, as well as plicies and charters that the cmpany develps, define the actins a cmpany can and cannt take. These varius authrities frm a set f requirements by which a prperly gverned cmpany must abide. Fr Nawras, the key gverning authrities include the fllwing: The Laws f the Sultanate f Oman. All cmpanies are subject t the laws f the jurisdictins in which they legally perate. Nawras is therefre subject first and fremst t all f the laws f the Sultanate f Oman. Amng thse laws, several are particularly ntewrthy fr their scpe and applicability: Ryal Decree N. 17/2005, which is the Ryal Decree that issues the Cmpany its licence t prvide mbile telecmmunicatin and related services within the Sultanate f Oman. The Telecmmunicatins Regulatry Act, which was enacted by Ryal Decree 30/2002 and established the Telecmmunicatins Regulatry Authrity and related regulatins and ministerial decisins that cver the telecmmunicatins sectr. Ryal Decree N. 34/2009, which is the Ryal Decree that issues the Cmpany its licence t prvide fixed telecmmunicatin and related services within the Sultanate f Oman. The Cmmercial Cmpanies Law, which was enacted by Ryal Decree N. 4/74 and its amendments, regulates the peratin f cmpanies rganised under the law f Oman The Capital Market Authrity Law, which was enacted by Ryal Decree N. 80/98 and established a gvernmental authrity respnsible fr rganising and verseeing the issue and trading f securities in the Sultanate (the Capital Market Authrity), as an exchange fr the trading f all listed securities (the Muscat Securities Market) Market Regulatins. All stck exchanges have detailed and specific rules gverning the cmpanies that list n their exchanges. In Oman, the Capital Market Authrity is respnsible fr rganising and verseeing the issuing and trading f securities n the Muscat Stck Exchange. The purpse f these market regulatins is t prmte cnfidence in investrs by develping and imprving all the prcess related t the stck market. Nawras Articles f Assciatin, which the sharehlders signed in December 2004, are the cnstitutin f the Cmpany and gvern the relatinship between the Cmpany s directrs and sharehlders. Bard Apprved 24 January 2010
Reslutins f the Nawras Bard and dcuments and/r plicies apprved by the Bard, including: This Crprate Gvernance Manual Cmpany plicies, including thse cntained r referenced in this Manual, such as: Cmpany Cde f Ethics and Cnduct Directrs Cde f Ethics and Annual Certificatin Rules fr Related Party Transactins Bard f Directrs Cmmittee Charters Management Cmmittee Charters Internal Audit Plicy Peple Plicy Prcurement Plicy Bard Apprved 24 January 2010
III. THE BOARD OF DIRECTORS A. Rle f the Bard The primary rle f the Bard f Directrs is t prvide entrepreneurial leadership t the Cmpany within a framewrk f prudent and effective cntrls that enable risk t be prperly assessed and managed. The Bard has full authrity t perfrm all acts required t manage the Cmpany in accrdance with its bjectives and with the primary bjective f creating value fr the Sharehlders. 3 This authrity is nt limited r restricted except as prvided by law, by the Articles f Assciatin r by a reslutin f the Sharehlders. 4 B. The Bard s Respnsibilities 1. Visin and Strategy Determining, refining and advancing the Cmpany s visin thrugh crprate strategy, majr plans f actin and business decisins, and by mnitring develpments and apprving variatins t the strategy and visin Analysing and apprving the Annual Operating Plan (AOP) and develping, reviewing and updating ther necessary plans t effectuate the Cmpany s bjectives 5 Ensuring that the Cmpany s rganisatinal structures and resurces are apprpriate fr implementing chsen strategies Identifying the values t be prmted thrughut the Cmpany frm time t time 2. Management Oversight Appinting the CEO 6 and all direct reprts t the CEO and specifying their rles, respnsibility, and pwer Supervising and assessing the perfrmance f executive management t ensue that the business is prperly managed t meet the Cmpany s bjectives 7 Wrking cllabratively with executive management in a mutually trusting envirnment, striving tward prmting cmpetence in the executive management team 3. Financial and Investment Mnitring the integrity f the Cmpany accunting and financial reprting systems, including the independent audit functin, and ensuring that apprpriate internal cntrls are in place 8 3 Nawras Articles f Assciatin, Article 31 4 Art. 31. See Articles 49-67. 5 Art. 32 6 Art. 31. Under Nawras Articles, The CEO/Manager may nt be the Chairman f the Bard. 7 Art. 31(c) 8 Arts. 68-81 detail requirements regarding the Cmpany s accunts. Bard Apprved 24 January 2010
Apprving financial statements related t the Cmpany s business and wrk results, as submitted quarterly by executive management t the Bard, in a manner that accurately reflects the financial psitin f Nawras 9 Apprving, within three (3) mnths f the end f the financial year, the Cmpany s balance sheet and a prfit and lss statement audited by the Cmpany s auditrs 10 Mnitring and managing ptential cnflicts f interest t avid, inter alia, misuse f crprate assets and abuse in related party transactins 11 4. Gvernance and Cmpliance Preparing, adpting and mnitring the effectiveness f crprate gvernance rules and disclsure practices in supprt f the Cmpany s cmmitment t best practices Apprving material internal regulatins f the cmpany regarding including specifying the respnsibilities and the authrities f the executive management Mnitring and ensuring cmpliance with legal and regulatry requirements thrugh prper internal cntrl systems Reviewing material transactins with related parties that are nt in the rdinary curse f business prir t bringing such matters befre a General Meeting Applying and maintaining high ethical standards thrughut Nawras 5. Cmmunicatins and Disclsures Apprving plicy and verseeing prcess f disclsure, cmmunicatins, and sharehlder reprting t ensure the fair and timely release f material infrmatin and cmpliance with regulatry requirements Including, in the Annual Reprt presented t the General Meeting: 6. Delegatin the reasns supprting the Cmpany s ability t pursue its specified activities and achieve its bjectives 12 an accunting f all amunts that each directr has received during the curse f the year, including any mney paid with respect t the directr s capacity as an emplyee f the Cmpany 13 a separate chapter n crprate gvernance and hw the cmpany has applied crprate gvernance principles 14 Apprving a frmal and cmprehensive delegatin f pwer t the varius levels f management, the Bard sub-cmmittees and any ther financially empwered grup r individual, with an awareness f the limits impsed by the Articles f Assciatin r applicable Omani law 9 Art. 31(f) 10 Art. 57 11 See Exhibit D fr Rules Regarding Related Party Transactins 12 Art. 31(g) 13 Art. 31(i) 14 See Appendix E, setting ut the tpics t be included in the crprate gvernance chapter. Bard Apprved 24 January 2010
Determining the frequency with which delegates must reprt t the Bard regarding the exercise f delegated pwers Ensuring that any persns acting pursuant t a delegatin frm the Bard will infrm the Bard at regular intervals abut decisins taken pursuant t such authrity 7. Individual Duties In additin t their cllective respnsibilities detailed abve, all Bard members individual duties and requisite characteristics include: Exercising their business judgment, n a fully infrmed basis, in gd faith and with due care, in the best interests f the Cmpany Pssessing and applying high intelligence and wisdm in decisin-making, and the ability t apprach thers assertively, respnsibly and supprtively Having the capacity t read and understand financial statements Demnstrating the ptential t cntribute twards effective stewardship f the Cmpany Treating all sharehlders fairly, particularly where Bard decisins might affect different sharehlder grups differently Applying high ethical standards in persnal and prfessinal dealings, taking int accunt the interests f stakehlders Cmplying with their duty f lyalty t the Cmpany in accrdance with the Cmpany Cde f Ethics and Cnduct Annually reviewing and acknwledging cmpliance with the Directrs Cde f Ethics and Cnduct Making every reasnable effrt t attend all Bard meetings and Bard cmmittee meetings f which they are members Attending the General Meetings f sharehlders Furthermre, nn-executive directrs, wh shuld nt invlve themselves in the daily rutine matters f the cmpany, shuld encurage and inspire a culture f accuntability n the part f management and seek meetings with the CEO and ther senir executives. Bard Apprved 24 January 2010
C. Bard Cmpsitin 1. Bard Size, Selectin, Appintment The Nawras Articles f Assciatin 15 prvide fr nine (9) members f the Bard f Directrs elected by the sharehlders. When the Bard is cnstituted, the majrity f its members shall be nn-executive directrs 16 Nminees t the membership f the Bard must be (i) at least 21 years ld, (ii) nt a member f the bard f directrs f a public r clsed jint stck cmpany that is based in Oman and carrying ut similar bjectives t that f the Cmpany; and (iii) nt cnvicted f a felny r dishnurable crime unless the nminee has been rehabilitated 17 2. Term f Membership The term f ffice f the Bard f Directrs shall be fr a maximum perid f 3 years subject t re-electin 18 3. Remuneratin The General Meeting shall specify the remuneratin f the Chairman and the members f the Bard, in accrdance with the prvisins f the Articles f Assciatin. 19 The Bard s reprt t the General Meeting shall include a full statement f all amunts and ther benefits that may have been received by each directr during the year fr services rendered t the Cmpany, including amunts paid t the directrs in their capacity as emplyees f the Cmpany. 20 A directr may be paid extra remuneratin if the directr, upn request f the Cmpany, perfrms special services fr the Cmpany. 21 The remuneratin fr the Bard shall be divided amng the directrs in such prprtins and manner as the directrs may agree, failing which the remuneratin will be divided equally amng them. 22 Bard remuneratin shall be aligned with the lnger-term interests f the Cmpany and its sharehlders. 15 See Appendix D 16 Art. 22(ii) 17 Art. 23(1) 18 Art. 22(i) 19 Art. 44. See als Arts. 45, 56 and 75 n remuneratin 20 Art. 44 21 Art. 46 22 Art. 47 Bard Apprved 24 January 2010
D. Chairman f the Bard 1. Selectin and Appintment f the Chairman Immediately fllwing the electin f a new Bard f Directrs by the Ordinary General Meeting, the Bard will elect frm its members a Chairman and a Deputy Chairman. 23 The term f the ffice f the Chairman and the Deputy Chairman shall nt exceed their term f ffice as members f the Bard f Directrs, but they may be reelected t their Chairman and Deputy Chairmanship psitins. 24 The Deputy Chairman shall assume the respnsibilities f the Chairman if the Chairman is absent r unavailable fr any reasn. 25 The ffice f Chairman is deemed vacant if the Chairman: (i) ceases t be a directr; (ii) resigns; r (iii) is remved frm ffice by a vte f a simple majrity f all directrs. 2. Rle f the Chairman The Chairman s principal respnsibilities are t prvide apprpriate leadership t the Bard, see that the Bard s reslutins are implemented, 26 and ensure that the Bard fulfils its bligatins as required under the relevant law. The Chairman s specific respnsibilities als include: Representing the Cmpany and the Bard befre judicial authrities and third parties 27 (such as sharehlders, creditrs, cnsumers, the lcal cmmunities and gvernment) and maintaining apprpriate nging cntact with them t ensure that the Bard understands their views Chairing the Bard, selected cmmittees, and sharehlder meetings and facilitating them with the aim f ensuring that discussins are cnducted in an pen and prfessinal manner where participants are encuraged t express their views Wrking with the CEO, Bard cmmittee chairmen and the Bard secretary t crdinate the schedule f Bard meetings, cmmittee meetings and ther imprtant meetings Wrking with the CEO t ensure that management prvides the Bard with the infrmatin it requires t cntribute effectively t the Bard decisin-making prcess and t mnitr the effective implementatin f Bard decisins Reviewing the adequacy and timing f dcumentary materials in supprt f management's prpsals and ensuring the prper flw f infrmatin t the Bard Guiding, prmting and ensuring the effectiveness and develpment f the Bard and individual Bard members and assigning specific tasks t them Ensuring that Nawras maintains a psitive and prductive relatin with media and ther fficial and nn fficial rganisatin 23 Art. 25 24 Art. 25 25 Art. 33 26 Art. 33 27 Arts. 25, 33 Bard Apprved 24 January 2010
E. Bard Secretary The Bard shall appint a secretary t the Bard, 28 t assist it and the Chairman with carrying ut their respnsibilities and t undertake ther duties essential t the prper functining f the Bard. The Secretary s duties and include: Acting as secretary f all meetings f the Bard f Directrs and the sharehlders f the Cmpany, and keeping the minutes Frmulating Bard and cmmittee agendas with the Chairman and CEO Drafting and distributing minutes f Bard and Cmmittee meetings Preparing fr Bard meetings by giving members and ther invitees sufficient ntice f dates and lcatin f meetings, distributing Bard materials in a timely manner, and btaining input frm peratinal units as apprpriate Assisting the Chairman during Bard meetings by managing the timetable and ensuring that minutes are taken that include the serial number, date f the meeting, subjects discussed, decisins reached and names f members present Maintaining prper and cmplete recrds f Bard activities Advising Bard members n their statutry duties and respnsibilities Ensuring that general sharehlders' meetings are held n schedule Ensuring that imprtant crprate recrds are retained in accrdance with applicable law and sund business practices Reviewing and verifying fficial publicatins and press releases, such as the Annual Reprt and statements by the Chairman Crdinating with the Legal Department (if that Bard Secretary functin is carried ut by an individual utside f the Legal Department) t mnitr and ensure cmpliance with general statutry and regulatry requirements In selecting a Secretary, the Bard shuld chse a candidate wh has sufficient knwledge f crprate law, gvernance and regulatins, as well as strng administrative, cmpany secretarial and cmmunicatin skills, including: Knwledge f the cmpany and its business, as well as applicable crprate and securities laws Ability t wrk with multiple Stakehlders, including Bard members, senir executives, sharehlders, emplyees and interest grups F. Bard Meetings Bard meetings shall be held at least six (6) times a year. N mre than fur (4) mnths shuld lapse between any tw cnsecutive meetings. 29 Bard meetings may be held anywhere in the Sultanate f Oman, r any ther place utside f Oman that the Bard has chsen. 30 28 Art 31(h) 29 Art. 31(h) 30 Art. 26 Bard Apprved 24 January 2010
The Chairman may, at any time, cnvene Bard meetings and shall d s upn request by tw r mre members. If the Chairman is unable r unwilling t cnvene the meeting when s requested, any tw members f the Bard may cnvene the meeting. 31 All directrs shall be given written ntice f any Bard meeting. The ntice, which shall be delivered by hand r sent thrugh the pst at least fifteen (15) days prir t the meeting, shall set frth the time, place, and agenda f the Bard meeting. The 15-day ntice requirement may be reduced nly in situatins f extreme necessity. 32 Bard members shall receive Bard meeting materials at least ne (1) week in advance. The minimum infrmatin required t be placed befre the Bard includes the fllwing: Capital and perating budgets and any updates Quarterly results f the cmpany Minutes f the meetings f the Audit Cmmittee and ther cmmittees f the Bard Infrmatin n recruitment, resignatin, remval and remuneratin f key executives Material shw cause r penalty ntices frm a regulatry bdy Serius accidents, dangerus ccurrences and pllutin prblems Material default in financial bligatins t r by the cmpany Issues invlving pssible public r prduct liability claims f substantial nature Jint venture agreements Transactins invlving substantial payment twards intellectual prperty/ gdwill/ brand equity Any significant emplyee relatins prblem Sale f investments, assets and divisins that are nt in the nrmal curse f business Nn-cmpliance with any regulatry requirement Details f any freign exchange expsure and steps taken t hedge the risks Any transactin that under the Cmpany s Limits f Authrity Manual requires Bard apprval The Bard shall keep minutes f all meetings as a true recrd f prceedings. The Chairman (r any ther persn wh presides ver the meeting) and the Secretary shall sign the minutes. 33 Dissenting members shall have the right t have their views recrded in the minutes. 34 31 Art. 26 32 Art. 27 33 Art. 29 Bard Apprved 24 January 2010
G. Qurum and Prxies At least half the Bard s members must be present r represented in rder fr a Bard meeting t be valid. 35 A crprate persn represented by a Bard member may appint anther persn as prxy t attend and vte n the member s behalf. 36 A Bard member may appint anther Bard member t act n his behalf, but n member may hld mre than ne prxy f anther directr. In all circumstances, such appintments shall be deemed special and must be made in writing. 37 H. Reslutins The passage f a Bard reslutin requires a simple majrity vte f the directrs present at the meeting, unless the Bard agrees that a greater majrity is required. 38 The Bard may adpt reslutins withut cnvening a meeting, prvided that the members f the Bard apprve all such reslutins in writing. This exceptin t cnvening a Bard meeting shall nt apply t reslutins regarding the distributin f dividends and apprval f the balance sheet, prfit and lss accunt and the reprts f the directrs and the auditrs f the Cmpany. 39 I. Bard Cmmittees The Bard may frm and delegate authrity t cmmittees, including but nt limited t an audit cmmittee. 40 The Bard cmmittees assist the Bard in the discharge f its respnsibilities by advising and making recmmendatins t the Bard and by exercising delegated authrity. Each Bard cmmittee shall have a written charter setting frth its respnsibilities, duties and authrities. 41 The Bard may add new Cmmittees r remve existing cmmittees, as it deems advisable fr purpses f fulfilling its primary respnsibilities. The Bard has established tw primary cmmittees: The Executive Cmmittee fcuses n strategic issues, and has respnsibility fr budget and prcurement issues The Audit Cmmittee assists the Bard in versight f the integrity f the financial statements f the Cmpany and the perfrmance f the Cmpany s internal audit functin Cmmittees are cmpsed f a chairman and at least tw ther Bard members appinted by the Bard, taking int accunt the backgrund and desires f each Bard member. The Bard can replace cmmittee members at any time 34 Art. 29 35 Art. 28 36 Art. 28 37 Art. 28 38 Art. 29 39 Art. 30 40 Art. 34 41 The Executive and Audit Cmmittee Charters are included in Appendix F. Bard Apprved 24 January 2010
The Bard appints a cmmittee Chairman, wh will lead cmmittee meetings and determine the cmmittee s agenda. The Bard appints a secretary t assist each cmmittee, based n the cmmittee s recmmendatin The chairpersn f each cmmittee, in cnsultatin with management and members f the cmmittee, as apprpriate, will develp the cmmittee's agenda fr each meeting Each cmmittee shall reprt t the Bard frm time t time regarding its activities Each cmmittee perates in accrdance with a written charter apprved by the Bard Cmmittees d nt have the pwer t make decisins with respect t the management f Nawras business and affairs except as expressly delegated by the Bard, either in the cmmittee's charter r in specific Bard reslutins. J. Directr Orientatin and Cntinuing Educatin The Chairman f the Bard shall be respnsible fr prviding a Bard member rientatin and nging Bard member educatin prgram, under which all Bard members shall peridically receive materials r briefing sessins n subjects that wuld assist them in discharging their duties as Bard members and ensure that their knwledge and understanding f the Cmpany s business remains current. The Bard may crdinate with the QI Crprate Gvernance Offices in establishing Bard member rientatin The Bard further expects all f its members t develp and expand a brad, current knwledge f the nature and peratin f the Cmpany s majr businesses T the extent apprpriate, training will be cnducted jintly with senir management K. Bard Perfrmance Evaluatin The Bard will undertake a frmal and rigrus annual evaluatin f its wn perfrmance and that f its cmmittees and individual Bard members. A neutral, cnfidential cnsultant will cnduct the evaluatin, taking int accunt previusly agreed bjectives and seeking input n a 360 degree basis The Bard shuld review the evaluatin with the cnsultant, utside the cntext f a frmal Bard meeting Fllwing review by the Bard, individual develpment prgrams will be develped fr each Bard member, including the pssibility f persnal caching. The Bard shuld make similar develpment prgrams available t senir management fllwing their evaluatins Bard Apprved 24 January 2010
L. Certificatin f Cmpliance Bard members shuld be an example fr all persnnel in the Cmpany with respect t the Cde f Ethics and Cnduct, which includes the Cmpany s plicy n insider trading. They shuld take all reasnable steps t avid any actual, ptential r perceived vilatins Each Bard member will sign an annual certificatin attesting that he r she has read and understd the Cde f Ethics and Cnduct and has nt cmmitted any vilatin f such plicy M. Crprate Indemnity and D&O Insurance Attracting qualified Bard members (and senir management) and prtecting them in their legitimate activities requires that crprate indemnity and insurance be available. Accrdingly, directrs and fficers insurance will be prcured in amunts and with cnditins apprpriate as decided by the Bard Any prvisin r stipulatin limiting the liability f directrs shall be null and vid. 42 Hwever, the Cmpany shall reimburse any directr fr defence csts in any civil r criminal prceedings arising ut f the directr s Bard activities, in the event that final judgement in such prceedings shall abslve the directr f liability 43 Directrs shall be liable fr damages caused by any actins they take that are illegal r beynd the scpe f their authrity, by any fraud r negligence in the perfrmance f their duties, r by their failure t act as prudent individuals in the circumstances 44 42 Art. 39 43 Art. 39 44 Art. 39 Bard Apprved 24 January 2010
IV. MANAGEMENT FUNCTION A. Executive Officers The executive management f the Cmpany is respnsible fr fllwing the instructins f the Bard in rder t put its plicies int effect. It is the respnsibility f executive management, under supervisin by the Bard, t run the Cmpany's business in an effective and ethical manner. The fllwing fficers have the mst direct crprate gvernance respnsibilities: the Chief Executive Officer, the Chief Operating Officer, the Chief Financial Officer, the Head f Internal Audit, and the Head f Legal. As part f its crprate gvernance respnsibilities, senir management is required t make an annual management discussin and analysis reprt t the sharehlders describing and analysing the present state f affairs and the future prspects f the cmpany in cncrete terms. This reprt is expected t cntain factual details withut impinging n the cmpetitive advantage f the Cmpany. In additin, senir management members are respnsible fr disclsing t the Bard all financial and cmmercial transactins in which they r relatives up t first degree have a persnal interest that ptentially might cnflict with the interests f the Cmpany. B. Management Cmmittees Management has established and frmalised tw crss-functinal management cmmittees t facilitate decisin-making and cmmunicatin between middle line managers and senir management. The Bard has als apprved the establishment f a Tender Cmmittee and a Pricing Cmmittee. Chief Executive Cmmittee (ExC) ExC is tasked with reviewing and endrsing all significant peratinal and strategic decisins that are delegated t management by the Bard. The cmmittee als acts as the principal frum thrugh which members liaise thrugh their ExC representatives with the Chief Officers f ther lines f business. Its members include Chief Officers f the cmpany (Executive; Operatins; Strategy; Cmmercial; Technical; Finance; HR and Legal). Senir Operatins Management Cmmittee (SOM) SOM is a crdinating and advisry bdy that aims t harness experience acrss the rganisatin and facilitate clse cperatin amng different departments with respect t crss functinal peratinal matters The cmmittee assists and advises ExC with day-t-day peratins management and the implementatin f strategy. Bard Apprved 24 January 2010
SOM serves as the principal frum thrugh which members liaise thrugh their SOM representatives with the heads f peratins. It members include all directrs, and heads f departments as determined by ExC frm time t time. Tender Cmmittee The Tender Cmmittee s bjectives are t regulate the admissin f all tenders and cntracts and ensure that the Cmpany maintains the highest standards f ethics in practices and activities related t tenders and prcurement. It members include the CEO, Chief Operating Officer, Chief Financial Officer, Chief Technical Officer, and the Directr f Legal Affairs. Other advisrs may be invited as and when the Chairman cnsiders it apprpriate. Pricing Cmmittee The Pricing Cmmittee s bjectives are t review and apprve the pricing f all new prducts and prmtins, and changes t the prices f prducts and prmtins, t ensure that the prfitability f the prduct r prmtin is acceptable. It members include the CEO, Chief Operating Officer, Chief Financial Officer, Chief Technical Officer, Chief Cmmercial Officer and the Directr f Legal Affairs. Other advisrs may be invited as and when the Chairman cnsiders it apprpriate. C. Internal Audit Functin The missin f Internal Audit is t prvide independent, bjective assurance and cnsulting services designed t add value and imprve the Cmpany s peratins. The scpe f wrk f Internal Audit includes determining whether the risk management, cntrl and gvernance plicies f the Cmpany are efficient, effective and adequate. Internal Audit s primary activities include: Auditing all significant (high risk) activities f the Cmpany at least nce per year Carrying ut audit assignments in accrdance with prfessinal standards Reprting n all matters arising frm audit and special assignments, and Maintaining independence and bjectivity f the Internal Audit functin. All the Cmpany s activities are subject t internal audit. Internal Audit staff shall have unlimited access t all the Cmpany s recrds and dcuments and shall have the right t request all the infrmatin they deem necessary t perfrm their duties prperly. Internal Audit staff shuld nt perfrm any peratinal duties fr the rganisatin r its affiliates. Any exceptin t this shall require apprval frm the Audit Cmmittee. Internal Audit functins must perate independently and avid any real r perceived cnflict f interest. Bard Apprved 24 January 2010
D. External Auditrs The external auditrs are respnsible fr prviding an unbiased and independent evaluatin f the Cmpany s financial recrds. Accrdingly, independent auditrs require bjectivity and integrity t prperly carry ut their functin. T ensure these qualities are met, the fllwing standards apply t the appintment and respnsibilities f the external auditrs: At the Annual General Meeting, the Bard shall recmmend the name f the auditrs fr electin, after cnsidering the views f the Audit Cmmittee. The auditrs shall be appinted fr ne (1) financial year. The same firm shall nt be appinted as external auditrs fr mre than fur (4) cnsecutive financial years. After cmpletin f a furth cnsecutive year as external auditrs, the firm will be eligible fr reappintment as external auditrs nly after a cling ff perid f tw (2) years. The auditrs shall nt be allwed t prvide nn-audit services, as such activity might affect their independence The external auditrs, as part f their audit prcess, shall reprt t the sharehlders any significant cncern(s) that cme t its attentin, particularly with respect t: Adequacy and efficacy f the internal cntrl systems in place Whether the business is a ging cncern. (The auditrs shall express their reservatins, if any, abut directrs assumptin f ging cncern) The adequacy f the systems set up by the cmpany regarding establishing their legal requirements applicable t the cmpany s area f peratins. Frauds detected r suspected by the external auditrs shall be reprted t the Bard f Directrs. If the fraud is material, hwever, the auditrs shall reprt the fraud t the apprpriate regulatrs. The auditrs shall issue an annual certificatin cnfirming that the Cmpany s crprate gvernance reprt is free frm any material misrepresentatin E. Nawras Respnsible Persn Gvernance Matters The Directr f Legal Affairs is respnsible fr mnitring Nawras crprate gvernance and cmmunicating and crdinating with ther individuals and cmmittees within Nawras regarding gvernance matters. The Directr f Legal Affairs will meet peridically with the Audit Cmmittee t present and discuss ptential issues and cnflicts fr cnsideratin. Bard Apprved 24 January 2010