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Key Takeaway

New Amended Provisions

Previous Provisions

Introduction

(Paragraph 1)

The reference to ‘Federal Decree by Law No (32) of 2021 Concerning Commercial Companies as amended’ has been added.

The Governance Code provides the necessary framework for regulating the company affairs. The provisions stipulated therein are based on the Federal Decree by Law No (32) of 2021 Concerning Commercial Companies as amended.

The Governance Code provides the necessary framework for regulating the company’s affairs. The provisions stipulated therein are based on the Federal Law No. 2 of 2015 concerning Commercial Companies.

Companies Law

The reference to ‘Federal Decree by Law No (32) of 2021 Concerning Commercial Companies as amended’ has been added.

Federal Decree by Law No (32) of 2021 Concerning Commercial Companies (the “Companies Law”).

Federal Law No (2) of 2015 Concerning Commercial Companies.

Board Member 

Chairman has been added to this definition.

Any member of the board of directors of the company including the chairman.

Members of the board of directors of the company.

Related Parties

Related parties’ definition has been extended to include the following:

1-     Relatives of the chairman and the board.

2-     Relatives of the senior management.

3-     The parent company.

4-     Major shareholders in the company (those who own 5% or more of the company’s shares or voting rights);

5-    Chairman and members of the board of directors of the company’s parent, subsidiary, sister, and affiliated companies.

6-  Companies in which any of the chairman or members of the company’s board of directors or members of the company’s senior executive management is a member of its board of directors or among its senior executives.

1-     The chairman, the members of the board of directors and their relatives.

2-     The members of the senior executive management and their relatives.

3-     The company’s employees.

4-     The companies in which any of those referred to above contribute not less than 30% of its share capital.

5-     The parent company and its subsidiaries, sister or affiliate companies.

6-     Major shareholders in the company (those who own 5% or more of the company’s shares or voting rights);

7-     Chairman and members of the board of directors of the company’s parent, subsidiary, sister and affiliated companies.

8-  Companies in which any of the chairman or members of the company’s board of directors or members of the company’s senior executive management is a member of its board of directors or among its senior executives.

The chairman, board members, members of the senior executive management and the employees of the company, in addition to the companies to which any of such persons contribute by at least 30% of its share capital, as well as the sister or affiliate companies or subsidiary companies.

Supervisory Committee

(New Addition)

New definition for the Supervisory Committee has been added.

A decision-making committee in the dual structure that is composed of non-executive board members and is responsible for monitoring the affairs of the executive committee and the company’s management.

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Board Secretary

(New Addition)

New definition to the Board Secretary has been added.

Secretary of the board of directors.

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Article 2(3)

Principles and Objectives of the Governance Code

The company must encourage cooperation between itself and stakeholders in relation to sustainable and solvent practices.

Responsibility:

The company shall recognize the rights of other stakeholders in accordance with the laws and regulations and encourage cooperation between the company and stakeholders in setting sustainable and solvent practices.

Responsibility:

The company shall recognize the rights of other stakeholders in accordance with laws and regulations and encourage cooperation between the company and stakeholders in establishing sustainable and solvent companies.

Article 3

Scope of Application and Enforcement of the Governance Code

The Governance Code applies only to local Public Joint Stock Companies listed on the market, and not to foreign companies, financial free zone companies, and free zone companies.

Subject to the provisions of the Companies Law, the Law of Evidence in Civil and Commercial Transactions, and the Civil Procedure Law in force in the country, this guide applies to local Public Joint Stock Companies listed on the market. The provisions of this guide do not apply to foreign companies listed on the market, financial free zone companies, and free zone companies.

Subject to the provisions of the Companies Law and the Federal Law No. (10/ 1992) concerning Evidence in Civil and Commercial Transactions, and Federal Law No. (11/1992) concerning Civil Procedures, this guide shall be applied to local Public Joint Stock Companies listed on the market. The provisions stipulated in this guide shall not be applied to foreign companies listed on the market.

Article 7(c)

Chairman of the Board

The board may elect a managing director, who is in turn not permitted to be the chief executive officer or the general manager of another publicly listed companies.

The board of directors has the right to elect from amongst its members a managing director whose powers and remuneration are to be determined by the board. The managing director may not be the chief executive officer or general manager of another company.

The board of directors shall be entitled to elect from amongst its members a managing director whose powers and remuneration are to be determined by the board.

Article 8 (1)

Board Secretary

The board must appoint a secretary who may not be a director. The board may alternatively seek assistance from an external party who from within the United Arab Emirates.

Appointment of the board secretary:

The board of directors shall appoint a secretary who reports directly to the board of directors and is not a member of the board of directors. The board of directors may seek the assistance of an external party from within the United Arab Emirates, whether a natural or legal person, and its powers and remuneration are determined by a decision of the board of directors.

Roles and responsibilities of the board secretary:

The board of directors shall appoint a secretary who is independent from the company’s management, and who shall report directly to the board of directors. The board of directors may seek the assistance of an external party. The authorities and remuneration of the board secretary shall be determined by way of a resolution by board of directors, unless the articles of association provide for provisions relating thereto.

Article 8(2)

Board Secretary

The secretary must at least hold a university qualification and must have experience and be competent in his/her role as a secretary.

Board secretary’s qualifications:

The board of directors shall determine the qualifications and standards that the board secretary must possess, provided that he holds a university qualification, and has experience and high competence in preparing board of directors’ files and follow-up reports.

Board secretary’s qualifications:

The board of directors shall determine the qualifications that the board secretary shall have, provided that he/she shall have at least one of the following qualifications:

(A)  a degree in law, finance, accounting, administration or other equivalent qualification and practical experience of not less than three years.

He/she shall be a competent person, preferably with an experience not less than three years in corporate governance.

8(3)(J)

Board Secretary

The secretary must coordinate between the directors, the executive management, and board committees.

(3) The board secretary assumes the following duties:

(J) Coordination between members of the board of directors, the executive management, and board committees.

(3) The board secretary assumes the following duties:

(J) Coordinating between members of the board of directors and the executive management.

Article 8(3)(L):

(New Addition)

Board Secretary

The secretary must ensure that any director who is a related party due to a deal or transaction must not attend or vote at a board meeting.

Verifying that a member of the board of directors, unless the board of directors decides otherwise, does not attend or participate in voting at the board of directors meeting that discusses a deal in which the board member is a related party, as well as verifying that he/she does not sign any decision related to such transaction.

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Article 8(4)

Board Secretary

The board may only dismiss, interfere with, or impose penalties on the secretary by a decision of the board, and it must notify SCA of its decision.

It is not permissible to remove the secretary of the board of directors, interfere in his/her work, or impose penalties or punishments on him/her except by a decision of the board of directors, provided that the SCA is notified of the dismissal decision.

The board secretary may only be dismissed by a board of directors’ resolution.

Article 9 (5)

Controls of Nomination for Board Membership

The articles of association will determine executive, non-executive and independent board members.

At least one third of the board must be independent, and the majority must be non-executive, and must all have the experience, skills and time required to serve the interests of the company.

The articles of association determine executive board members, non-executive board members and independent board members, provided that at least one-third of the board members are independent, and the majority are non-executive board members who  shall have the technical skills and experience required to serve the interests of the company. in all cases, when selecting non-executive board members of the company, it shall be taken into consideration that a board member shall be able to dedicate adequate time and effort to his/her role and that such role is not in conflict with his/her other interests.

The articles of association shall determine executive board members, non-executive board members and independent board members; provided that at least one third of board members shall be independent non-executive board members who shall have the technical skills and experience required to serve the interests of the company. in all cases, when selecting non-executive board members of the company, it shall be taken into consideration that a board member shall be able to dedicate adequate time and effort to his/her role and that such role is not in conflict with his/her other interests.

Article 9(7): (New Addition)

Controls of Nomination for Board Membership

After opening the nomination period, no agenda item can be added to amend the number of board members in the articles of association.

Refrain from including a new agenda item to amend the articles of association to increase the number of members of the board of directors after opening the nomination period.

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Article 10 (1)

Terms of Nomination to Board Membership

The candidate for board membership must have previous experience in the company’s industry.

The candidate must have experience and competence in the fields that serve the field of the company whose board of directors the candidate is nominated for membership (for example, but not limited to: financial, legal, administrative, or executive expertise).

The candidate shall have at least five-years of experience in the field of the company wherein he/she is nominated for board membership.

Article 10 (7) (b)

Terms of Nomination to Board Membership

The candidate for board membership must provide a written acknowledgment accepting his nomination.

A written acknowledgment of his acceptance of the nomination and his commitment to the provisions of the Companies Law, its executive decisions it and the company’s articles of association, and that he will exercise the care of a prudent person in performing his/her duties.

An undertaking to comply with the provisions of the Companies Law and its executive decisions and the company’s articles of association, and that the candidate will exert the due diligence of a prudent professional person during the performance of his/her duties.

Article 10(7)(E)

(New Addition)

Terms of Nomination to Board Membership

The candidate for board membership must provide a criminal status certificate issued in the United Arab Emirates.

A criminal status certificate issued or certified by one of the official authorities in the United Arab Emirates or outside it if the candidate resides outside the country, provided that it is authenticated in accordance with the procedures followed in the country.

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Article 10(8)

(New Addition)

Terms of Nomination to Board Membership

If the candidate for board membership cannot provide the required documents under article 10(7), the application for board membership will be considered null and void.

In the event that all the documents mentioned in the previous article are not submitted during the period when nominations for membership in the company’s board of directors are open, the nomination application will be considered null and void.

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Article 11(2)

Declaration of Interest

Board members must disclose anything that may create a potential conflict, and must notify the company if there is a change in his/her interest, ensuring the data disclosed is accurate.

In particular, members of the board of directors shall disclose partnerships, related employment or the main interests for his/her relatives that may create a conflict or potential conflict in interests. Each board member shall notify the company of any changes in his/her interests and shall complete a form prepared by the company for this purpose on a quarterly basis and as may be necessary to determine specifically his/her interests. Each member of the board of directors bears responsibility for the accuracy of the data and disclosures provided by him/her, as well as responsibility for concealing or inaccurate any of this information.

In particular, board members shall disclose partnerships, related employment or the main interests for his/her relatives that may create a conflict or potential conflict in interests. Each board member shall notify the company of any changes in his/her interests and shall complete a form prepared by the company for this purpose on a quarterly basis and as may be necessary to determine specifically his/her interests.

Article 12

Induction, Training, and Evaluation of the Board

A heading has been added to this article.

Board of director induction.

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Article 12(1)(E): (New Addition)

Induction, Training, and Evaluation of the Board

The Company shall provide to the new board members and senior executive management with an induction program which includes all company corporate documents and important operational and strategic information.

The company’s articles of association and regulations, organizational structure, names, and activities of subsidiaries (if any), performance reports, important documents such as investment strategy, debt statement, information about other board members, senior management and the board secretary.

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Article 12(2)

Induction, Training, and Evaluation of the Board

The board must conduct an annual evaluation of its performance, including the performance of its committees. It must further invite, once every three years, an independent professional entity to evaluate its performance. This annual evaluation must be included in the annual governance report.

Evaluation of the board, board committees and executive management

(A)   The board shall conduct an annual evaluation of its performance and the performance of its members and committees to determine ways to strengthen its effectiveness. The evaluation process can be carried out either through the nominations and remuneration committee or by the chairman of the board, assisted by the board Secretary if needed.  And where appropriate, independent consultants may be invited to assist the board in this process.

(B)   The board of directors is committed to inviting, every three years, an independent professional entity that has no interest or relationship with the company or any of the members of its board of directors or executive management, to evaluate the performance of the board of directors, its members, and its committees.

(C) The board of directors is committed to including in the corporate governance report the annual evaluation and evaluation of the independent entity referred to in the previous two paragraphs.

Board evaluation:

The board shall conduct an annual evaluation of its performance and the performance of its members and committees to determine ways to strengthen its effectiveness. The evaluation process can be carried out either by the nomination and remuneration committee or by the chairman of the board, assisted by the board secretary if needed. And where appropriate, independent consultants may be invited to assist the board in this process.

Every three years, the board shall invite an independent professional entity to evaluate the board, committees, and the board members.

Article 13(5): (New Addition)

Board Responsibilities

The board of directors bears responsibility for concealing any material information or incorrectly disclosing such information, even if this does not result in harm to others.

The board of directors bears responsibility for concealing any material information or incorrectly disclosing such information, even if this does not result in harm to others.

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Article 14(2)

Board Obligations

(A)  Supervising and deciding on the company’s strategic, financial, operational and structural elements.

(A)   the company’s comprehensive strategy and main business plans.

(B)   the risk management policy.

(C)   To determine the best capital structure, strategies, and financial objectives of the company, and to approve the annual budgets.

(D)   To supervise the company’s main capital expenditure and its ownership and disposal of assets.

(E)    This has been deleted.

(B)  Conducting periodic reviews of the company organizational and occupational structures and adopting such structures.

(C)  To set and constantly review of the company’s comprehensive strategy and main business plans;

(D)  To set and constantly review risk management policy;

(E)  To determine the best capital structure, strategies, and financial objectives of the company, and to approve the annual budgets;

(F)   To supervise the company’s main capital expenditure and its ownership and disposal of assets;

(G)  To set the performance objectives and to monitor its implementation and the overall performance of the company; and

(H)  Conducting periodic reviews of the company organizational and occupational structures and adopting such structures.

Article 14(3)(A)

Board Obligations

Ensuring and approving a policy for internal auditing that follows up on compliance with approved systems and regulations.

To take the necessary procedures to ensure that the internal audit goals are achieved, including:

Formulating a well-defined policy endorsed by the board of directors aimed at facilitating internal audit procedures and monitoring the adherence of departments and divisions to approved systems and regulations.

To take the necessary procedures to ensure efficient internal auditing on the workflow within the company, including:

Setting a clear policy approved by the board of directors to ensure efficient internal auditing on the workflow within the company.

Article 14(7)

Board Obligations

The Board must define and adopt a control and risk management framework and ensure its implementation in accordance with global practices (COSO recommended).

Develop, define and adopt the appropriate internal control and risk management framework in respect to the company’s operations and ensure its implementation in accordance with global practices (COSO recommended) through the following:

(A)   Developing the appropriate control environment in the company.

(B)   Designing and developing internal control procedures in the company.

(C)   Providing information and preparing internal reports.

(D)   Supervising the performance of internal control systems, evaluating their effectiveness, and taking corrective measures regarding them.

(E) Enabling the auditor to express an opinion on the effectiveness of internal control and risk management systems.

Ensure the use of appropriate regulatory systems for risk management by outlining potential risk and addressing it with transparency.

Article 14(17)

Board Obligations

Adopting criteria that outlines the incentives and rewards for the board of directors and senior executive management to incentivize achieving the company’s long-term goals.

Adopting criteria for granting incentives, rewards and benefits to members of the board of directors and senior executive management in a way that helps achieve the company’s interest, goals and objectives in the long term.

Adopting criteria for granting incentives, bonuses, and privileges to board members and senior executive management in a manner that serves the company’s interest and realizes its objectives.

Article 14(26)

Board Obligations

The below mentioned board obligation has been deleted:

“Determining and recommending the potential new board Members to be elected shareholders.”

Deleted.

Determining and recommending the potential new board members to be elected shareholders.

Article 14(27)

Board Obligations

Proposing a remuneration policy for the board of directors.

Proposing the remuneration policy of the board of directors for approval by shareholders.

Recommending the remuneration policy of the board of directors for approval by shareholders.

Article 14(31)

Board Obligations

The below mentioned board obligation has been deleted:

“Evaluating the performance of the board committees and its members.”

Deleted.

Evaluating the performance of the board committees and its members.

Articles 14(32) – 14(39)

Board Obligations

(New Addition)

Establishing and ensuring that the company’s internal policies and guidelines cover all aspects of the company’s operations, such as corporate governance, performance, achieving targets, appointments / terminations, and approving internal procedures and guidelines.

(32) Establish internal policies and guidelines to cover all aspects of the company’s operations.

(33) Monitoring the application of corporate governance rules and constantly updating them.

(34) Evaluate and monitor the performance of executive management against goals and budget.

(35) Appointment and termination of executive management/senior management.

(36) Review and approve transactions with related parties.

(37) Evaluating and approving projects and investments within the limits approved by the board.

(38) Reviewing the company’s operations, evaluating its activities and the performance of the committees emanating from the board of directors, and taking appropriate measures if performance does not comply with its plans.

(39)  Approving internal procedures, policies and guidelines for managing the company’s affairs, and defining the powers of executive management.

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Article 15(2)

Duties of the Chairman

Set and approve the agenda of each board meeting, and ensuring that the chairman provides sufficient time to discuss the agenda items. It is the chairman’s responsibility to ensure board members receive accurate information on agenda items.

Set and approve the agenda of each board meeting taking into consideration any issues proposed by the board members to be included in the agenda. The chairman may delegate such responsibility to a certain board member or to the board Secretary under the chairman’s own supervision. The chairman of the board must ensure that sufficient time is available for discussion.  It is the responsibility of the chairman to ensure that members receive accurate and clear information on all agenda items, especially on strategic matters.

Set and approve the agenda of each board meeting taking into consideration any issues proposed by the board Members to be included in the agenda. The chairman may delegate such responsibility to a certain board member or to the board Secretary under the chairman’s own supervision.

Article 15(20)

Duties of the Chairman

The board of directors’ report must include a statement/item on the details of the contracts and conflict of interests

Include a statement/item in the board of directors’ report explaining the business and contracts in which any member of the board of directors has a direct or indirect interest, the information that that member provides to the board of directors, and what has been included in the company’s external auditor report in this regard.

Notify the General Assembly during its meetings of the business and contracts in which any board member has a direct or indirect interest. Such notification shall include the information provided by the member to the board and shall be accompanied by a special report from the external auditor of the company.

Article 18(1)

Convenience Standards

Members of the board of directors, individually and collectively, must at all times meet the standards of suitability and appropriateness (Fit and Proper) set out under the Governance Code.

Members of the board of directors, individually and collectively, must at all times meet the standards of suitability and appropriateness (Fit and Proper) set forth below, and shall have the experience, knowledge, competencies, skills, and independence that enable them to efficiently and effectively perform their duties. The board of directors shall prepare the code of professional conduct to promote good behaviors.

Board members shall, individually and collectively at all times, meet the standards of suitability and appropriateness set forth below and shall have the experience, knowledge, competencies, skills, and independence that enable them to efficiently and effectively perform their duties. The board of directors shall prepare the code of professional conduct to promote the good behaviors.

Article 19(1)

Board Members Lack of Independency

The reference to “First” has been deleted.

The board member shall lose his independence in the following cases (the reference to “First” was deleted).

First: The board member shall lose his independence in the following cases.

Article 19(9)

Board Members Lack of Independency

The board member loses his independence is he/she was selected for a third consecutive term.

If a board member is selected for a third consecutive term.

If a board member is selected for a fourth consecutive term.

Article 19 Second

Board Members Lack of Independency

The below paragraph has been deleted:

“Independence of a board member shall not be affected solely for being an employee of the parent company or any of its subsidiaries if any of them is a government entity or a company owned by at least 75% by the government or any of its subsidiaries.”

The “Second” paragraph has been deleted in its entirety.

Second:  Independence of a board member shall not be affected solely for being an employee of the parent company or any of its subsidiaries if any of them is a government entity or a company owned by at least 75% by the government or any of its subsidiaries.

Article 20

Sole Liability of Board Members

Board members must act in the best interest of the company, regardless of their interest or the interests of any other partes. They must also ensure to conduct the company’s affairs in a manner that supports the public’s confidence in the company and must ensure they avoid acting in a manner that leads or may lead to a conflict of interest. If a conflict of interest does arise, the board members must immediately disclose this in writing and distance themselves from any decision-making.

Members of the board of directors must act at all times in the best interest of the company, regardless of their interests or the interests of any other parties. The board members must perform their duties and conduct the company’s affairs in a manner that supports the public’s confidence in the company.  Members of the board of directors must also refrain from actions that lead or may lead to a conflict of interest with the company. If a conflict of interest situation arises, the members of the board of directors are obligated to disclose it immediately to the board of directors in writing and to distance themselves from any position of decision-making authority in relation to any conflict situation involving the company.

Members of the board of directors shall act at all times in the interest of the company regardless of the interests of any other parties. The board Members shall perform their duties and conduct the affairs of the company in a manner that supports the trust of the general public in the company. They shall also refrain from actions that lead or may lead to conflict of interest with the company. In the event of a conflict of interest, the  members of the board of directors shall disclose the same immediately to the chairman and get themselves away from the decision-making authority in respect of any conflict of interest involving the company.

Article 21(1)

Vacancy of Board Member Position

If a board position becomes vacant, the board has 30 days to appoint another member, otherwise they must open the door for nominations to elect a member. The elected candidate shall complete the term of his predecessor.

Subject to the provisions of Article (145) of the Companies Law, if the position of a board member becomes vacant, the board may appoint a member to the vacant position within a maximum period of 30 (thirty) days, provided that this appointment is presented to the general assembly at its first meeting for approval to appoint him  or to appoint someone else, unless the company’s articles of association stipulate otherwise, and the new member shall complete the term of his/her predecessor. In the event that a new member is not appointed to the vacant position during that period, the board must open the door for nominations to elect a member for the vacant position at the first meeting of the general assembly, and the new member shall complete the term of his predecessor.

Subject to the provisions of Article (143) of the Companies Law, if the position of a board member becomes vacant, the board may appoint a member in the vacant position, provided that such appointment shall be submitted to the general assembly at its first meeting for confirming the same or appointing another one, unless otherwise stipulated in the company articles of association. the new member of the board of directors shall complete the term of its predecessor.

Article 22 (3)

Dismissal of the Members of the Board or Senior Executive Management

If a chairman, board member or member of the executive management received a judgement of imprisonment or fine, or a shareholder complaint against him/her, the individual shall not remain in their office until the expiry of three years from such judgement date.

In the event of issuing a judgment of imprisonment or a fine or any of them due to a complaint raised by a shareholder against the chairman or any board member or the member of the executive management, including dismissal or removal from office, the member shall not remain in such office or run for the board membership of this company or any other company till the expiry of three years from the date of such judgment.

In the event of issuing a judgment of imprisonment or a fine or any of them due to a complaint raised by a shareholder against the chairman or any board member or executive committee member, including dismissal or removal from office, the member shall not remain in such office or run for the board membership of this company or any other company till the expiry of three years from the date of such judgment.

Article 23 (2)

Board Meeting

The board meeting shall be based on written or electronic invitation by the chairman, or upon written request by two or more board members (subject to the company’s articles of association), and each member may add to the agenda any matter they deem necessary.

The board meeting shall be conducted based on a written or electronic invitation by the chairman of the board of directors, or upon a written request submitted by at least two members of the board unless the company’s articles of association stipulate otherwise. Each member has the right to add to the agenda any matter he deems necessary for discussion in the meeting.

The board meeting shall be conducted based on a written invitation from the board chairman, or upon the written request of at least two board members unless the company’s articles of association provides otherwise. The invitation shall be sent not less than one week prior to the specified date together with the agenda. Each member has the right to add to the agenda any matter he deems necessary for discussion in the meeting.

Article 23 (3)

Board Meeting

Invitation to be sent along with the agenda and board materials at least one week ahead of the board meeting.

The invitation, together with the agenda and all documents attached, shall be sent at least one week before the meeting to all members.

All documents shall be sent to all members at least one week before the meeting.

Article 23 (4)

Board Meeting

A board meeting must be held to consider inviting for a general assembly at least 30 days before the date of the general assembly, and must immediately disclose after such board meeting this to shareholders via the market and company’s websites, which must indicate the expected date for publishing the general assembly invitation, alongside the most important agenda items including any proposed special resolutions to be proposed.

In case of a board of directors meeting being held to consider inviting for the general assembly meeting, then such board meeting shall be held at least 30 (thirty) days before the date of the general assembly meeting and the company shall disclose an immediate disclosure to shareholders is required by issuing a detailed notice to the market and on the website of the company directly after the conclusion of the board’s meeting. Indicating the expected date for publishing the general assembly invitation and the most important agenda items, in particular the board of directors’ proposal regarding dividend distributions and any special resolutions proposed, to be presented to the general assembly.

In case of a board of directors meeting being held to consider inviting for the general assembly meeting, then such board meeting shall be held at least 30 (thirty) days before the date of the general assembly meeting, and an immediate disclosure to shareholders is required via issuing a detailed notice to the Market and on the website of the company directly after the conclusion of the board’s meeting. Such notice shall consist of the board resolutions, the date of publication of the general assembly’s invitation in addition to the detailed agenda of the general assembly meeting. Moreover, the notice shall include the following: “(1) Clarification concerning those who have the right to attend the general assembly meeting or authorizing someone to attend other than the board members pursuant to a written delegation; (2) the eligibility of the shareholder to discuss the topics listed in the agenda of the general assembly and to raise questions to the board members and the auditors; and (3) the legal quorum required for the validity of the general assembly meeting and the resolutions of such meeting”.

Article 23 (9)

Board Meeting

In the event of an urgent board meeting, all board members must agree that the urgent meeting is indeed an emergency. This meeting will not be considered as one of the four annual mandatory board meetings.

Taking into account any other requirements related to holding a board of directors meeting, in the event that an urgent board of directors meeting is held without implementing the provisions of clause (3) of this Article, all board members must agree that the situation that calls for the urgent meeting is an emergency, and this meeting is not considered as one of the four mandatory meetings of the board of directors.

In the event of an urgent board meeting without applying provisions of clauses (2 and 3) of this Article, this board meeting shall not be considered as one of the four mandatory meetings of the board of directors.

Article 23 (10)

Board Meeting

No one other than the board members or the board secretary can attend the board meeting. However, chairman can invite advisors or members of the executive management in certain cases.

No one other than members of the board of directors may attend board meetings, except for the Secretary of the board of directors and anyone whose presence is required to provide his opinion from the company’s executive management or board advisors shall attend based on a written invitation from the chairman of the board of directors. Observers or shareholders’ representatives may not attend.

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Article 25 (1)

Board Resolutions by Way of Circulation

When passing a board resolution by circulation, all board members must consent and confirm that the situation requires the issuance of a resolution by circulation is an emergency.

The consent of all board members that the situation that requires the issuance of a resolution by circulation is an emergency.

The written consent of the majority of the board members that the situation that requires the issuance of a resolution by circulation is an emergency.

Article 25 (4)

Board Resolutions by Way of Circulation

A disclosure must be made on the market’s and company’s websites of the results of the resolution by circulation immediately upon its issuance.

A disclosure must be made on the market’s website and the company’s website of the results of the board of directors’ resolution by circulation immediately upon its issuance in accordance with the relevant disclosure requirements.

The board resolution by circulation is not considered a meeting, hence the minimum number of meetings of the board of directors set out in the articles of association of the company shall be maintained.

Article 29 (1)

The Remuneration of the Chairman and Board Members

The company’s articles of association must provide the mechanism of calculating the board’s remuneration. In any case, it may not exceed 10% of the company’s net profits for the year.

The articles of association shall indicate the mechanism of calculating the remuneration of the board members provided that it does not exceed 10% of the net profit of the relevant financial year after deducting all consumption and reserves.

The remuneration of the chairman and board members is made up of a percentage of the net profit not exceeding 10% of the fiscal year profits after deducting all consumption and reserves.

Article 29 (2)

(New Addition)

The Remuneration of the Chairman and Board Members

Notwithstanding clause (1) of this article, any director may be paid a lump sum remuneration of a maximum of AED 200,000 at the end of the fiscal year, but only in the following cases: (1) the company did not generate any profits; or (2), the company generated profits, but the director’s share in such profits is less than AED 200,000. In which case, the fixed fee and the board remuneration may not be combined.

Notwithstanding clause (1) of this article, any director may be paid a lump sum remuneration not exceeding AED 200,000 (two hundred thousand) dirhams at the end of the fiscal year, provided that the company’s articles of association so permits and that the general assembly has approved the payment of such remuneration only in the following cases:

–     If the company has not generated any profits;

–     If the company generates profits but the share of each board member in such profits is less than AED 200,000. In which case, the fixed fee and the board remuneration may not be combined.

N/A

Article 29 (5)

(New Addition)

The Remuneration of the Chairman and Board Members

The remuneration policy must contain the mechanism of calculating the board member’s and executive management’s remuneration and must look at comparable remuneration when being decided. The remuneration policy shall contain the mechanism of calculating the remuneration of the board members and the executive management in addition to comparing such proposed remunerations against the private sector and other companies in the same industry with a similar average rate (locally, regionally, and internationally).

The remuneration policy shall contain the mechanism of calculating the remuneration of the board members and the executive management in addition to comparing such proposed remunerations against the private sector and other companies in the same industry with a similar average rate (locally, regionally, and internationally).

N/A

Article 30

Gifts

Any gift that is accepted by a board member,  of symbolic or simple value of AED 500 or less, must be disclosed to the board of directors.

Acceptance of gifts and other compliments from persons or authorities may lead to conflict of interest, if the party giving such gift or compliment does so in certain circumstances wherein it may be concluded that this act was intended to influence or may influence the board member in performing his/her duties. This article shall not prevent accepting objects of symbolic or simple value of AED 500 or less or entertainment of symbolic or simple value which is not related to any special transaction or activity of the company, provided that it is disclosed to the board of directors.

Acceptance of gifts and other compliments from persons or authorities may lead to conflict of interest, if the party giving such gift or compliment does so in certain circumstances wherein it may be concluded that this act was intended to influence or may influence the board Member in performing his/her duties. This article shall not prevent accepting objects of symbolic or simple value of AED 500 or less or entertainment of symbolic or simple value which is not related to any special transaction or activity of the company.

Article 34(1)

Transactions with Related Parties

Any related party with a vested interest in the related party transaction is prohibited from voting on its resolution, and they should refrain from attending the board meeting or engaging in discussions concerning said transaction, unless the board decides otherwise. Furthermore, all related party transactions must be disclosed in the report submitted to the general assembly.

Any transaction between the company and a related party must be approved by the board of directors if the value of the transaction is 5% or less of the company’s share capital, and must be approved by the company’s general assembly if such threshold is exceeded.  Transactions that exceed (5%) of the issued capital have to be evaluated in line with the relevant guidelines issued by SCA.

Any related party with a vested interest in the related party transaction shall abstain from participating in the voting process for decisions made by the board of directors or the general assembly concerning said transaction. Moreover, the related party is not permitted to attend the board meeting or participate in the discussions related to such transaction during the board meeting, unless the board decides otherwise. In all cases that the related party transactions must be disclosed in the report submitted to the general assembly.

Any transaction between the company and a related party must be approved by the board of directors if the value of the transaction does not exceed 5% of the company’s capital and shall be approved by the company’s general assembly if such threshold is exceeded.  Transactions that exceed (5%) of the issued capital have to be evaluated by an evaluator accredited by SCA. The related party who has an interest in the transaction shall not participate in voting in terms of the decision taken by the board of directors or the general assembly in respect of this transaction. The related party who has an interest in the transaction shall not participate in voting a decision of the board or general assembly in respect of this transaction.

Article 34(3)(C)

This Article has been deleted.

This Article has been deleted.

The evaluation of transactions relating to the related parties shall be subject to the same controls prescribed for the evaluation of the in-kind shares set out in the decision of the Chairman of the Authority No. (11/RM) of 2016 regarding the regulation of offering and issuing shares of Public Joint Stock companies, which requires the following conditions in the evaluator:

–  The evaluation company shall have experience in its field of work not less than (5) five years, along with the submission of a certificate from the parties with which previous deals were made.

–  The evaluation company shall have a minimum of (3) years’ experience in valuing assets similar to the asset under evaluation.

The evaluation company shall be licensed / registered by the competent authorities as the case may be.

Article 34(4)

(New Addition)

The board must ensure that there is no conflict between the valuer and the related party.

The board of directors must ensure that there is no conflict of interest between the valuer and the related parties regardless of the conflict’s nature.

N/A

Article 35

Transactions that fall under Company Business Nature

Transactions that fall under the company business nature to be disclosed in the annual report that will be raised to the general assembly.

The transactions that fall under the nature of the company’s business and do not grant the board Member any preferential conditions shall not be considered related party transactions and shall not constitute a conflict of interest. However, the board member involved in such a transaction shall disclose the same to the board. The remaining presenting board members shall review whether it is appropriate for the board member involved in such transaction to participate in the discussion of the item relating to that transaction in the board meeting in addition to disclosing it in the annual report that will be raised to the general assembly.

The transactions that fall under the nature of the company’s business and do not grant the board Member any preferential conditions shall not be considered related party transactions and shall not constitute a conflict of interest. However, the board member involved in such a transaction shall disclose the same to the board. The remaining presenting board members shall review whether it is appropriate for the board member involved in such transaction to participate in the discussion of the item relating to that transaction in the board meeting.

Article 37

Company’s Disclosure of Related Party Transactions

The Chairman’s disclosure of related party transactions must be made to SCA and the market. SCA must receive written confirmation that the terms of the transaction are fair and are not preferential in either its value or terms and is in favor of the shareholders.

The annual corporate governance report shall include all the details and information relating to such transactions.

In case of entering into transactions with related parties, the company’s chairman shall provide SCA and the market with a statement that contains the relevant data and information regarding the related party, and any financials or information or documents that SCA may request, along with a written confirmation that the terms of the transaction with the related party are fair and are not preferential in either its value or terms and is in favor of the shareholders. The annual corporate governance report shall include all the details and information relating to such transactions.

In case of entering into transactions with related parties, the company’s chairman shall provide SCA with a prior notice indicating the data and information of the related party, the details of the transaction, its nature and the benefit of the involvement of the related party in such transaction, together with a written confirmation that the terms of the transaction with the related party are fair, reasonable, and in favor of the company’s shareholders.

Article 40 (2)

General Assembly Meeting

The licensed financial markets in the UAE can certify the signature the shareholder’s signature on the power of attorney concerning general assembly meetings.

The shareholder’s signature on the power of attorney (the written delegation mentioned above) shall be the signature certified by any of the following:

(A)  Notary Public.

(B)  Commercial chamber or economic department in the UAE.

(C)  Bank or company licensed in the UAE provided that the agent shall have account with any of them.

(D)  The licensed financial markets in the UAE.

Any other entity licensed to perform attestation.

The shareholder’s signature on the power of attorney (the written delegation mentioned above) shall be the signature certified by any of the following entities, and the company must take the appropriate measures to verify the signature:

(A)  Notary Public.

(B)  Commercial chamber or economic department in the UAE.

(C)  Bank or company licensed in the UAE provided that the agent shall have account with any of them.

Any other entity licensed to perform attestation.

Article 40(6) (A)

General Assembly Meeting

Voting in the general assemblies must be in line with the mechanism set by the market and approved by SCA.  As such, the general assembly invitation shall indicate the e-voting mechanism.

The shareholder may vote in the company’s general assembly meetings in accordance with the mechanism followed by the market in which the company’s shares are listed and as approved by the SCA. In such case, the following conditions shall be met:

A.     The invitation of the general assembly shall indicate the mechanism of electronic voting in general assemblies.

Subject to the provisions of Article (183) of the Companies Law, the shareholder may vote in the company general assembly meetings in accordance with the mechanism followed by the market in which the company shares are listed and approved by the SCA. In this case, the following conditions shall be met:

A.     The company’s articles of association shall allow the use of electronic voting in the general assembly meetings.

Article 40/bis

General Assembly Meeting

General meeting to be held via modern technology in accordance with the Companies Law.

Firstly:

Subject to Article (185) of the Companies Law, the general assembly meeting of the public joint stock company may be convened via audio-video modern technology without in-person attendance, and the ability of the shareholder to participate in the discussions and voting procedures on resolutions throughout the general assembly using modern technology in accordance with the following:

1)     That the constitutive general assembly meeting, the annual general assembly meeting, and any general assembly meetings which includes special resolutions must be held in person, with giving the option of using modern technology to attend remotely/from distance.

2)     Obtaining SCA’s approval in the event of holding a general assembly meeting other than what is mentioned under paragraph (1) above of this Article.

3)     The chairman of the meeting shall comply with indicating the number of shares participating in the meeting through in person attendance, and through remote attendance upon announcing the completion of the quorum required for the meeting.

4)     Upon voting on the general assembly meeting resolutions, the vote collector shall indicate the number of votes participating through in person attendance and through remote attendance on each resolution of the general assembly meeting.

Secondly:

The company shall comply upon convening the general assembly meeting remotely through modern technology with the following:

1.      Provisions of the Companies Law regarding organizing the general assembly meeting of a public joint-stock company, such as the announcement, the quorum for attendance, the mechanism for voting on decisions, and other provisions regulating such general assembly meetings.

2.      The invitation of the general assembly shall contain the mechanism of electronic registration for attending the general assemblies.

3.      To obtain the shareholders’ consent prior to the meeting on using the mechanism or remote attendance technology and his full knowledge of the mechanism of using this technology to attend and vote.

4.      The mechanism shall include:

a-      Real-time visual communication mechanism (sharing with audio and video – via an Internet application).

b-     The mechanism for verifying the identity of the shareholder present remotely or his proxy representative at the meeting by matching the photo contained in the identification documents (ID or passport) with the photo of the person present in real time before the start of the meeting, The company shall save the supporting documents for a period of no less than 10 years and submit them to the SCA when the demanded.

c-      The process for documenting and archiving meeting proceedings by recording them in both audio and video formats for a minimum duration of ten (10) years, with the provision of submitting them to the SCA upon their request.

5.      Ensuring prompt resolution of any technical errors that may arise during the meeting to maintain shareholders’ participation and facilitate their ability to engage in discussions and voting.

6.      Re-voting/Reconsidering the decision in the event that the votes of shareholders participating remotely cannot be collected due to any reason, fault, or technical malfunction that is not attributable to the shareholders themselves.

Any other requirements as determined by the SCA.

N/A

Article 41(2)

Invitations to the General Assembly

Invitations to general assembly meetings must be published on the company’s website and the financial market where the company’s shares are listed.

Notices to shareholders is to be given by registered letters or through modern means of technology in accordance with the articles of association.

With the exception of the postponed general assembly meeting due to lack of a quorum in accordance with the provisions of Article (185) of the Companies Law, the invitation to hold the general assembly meeting shall be sent after the SCA’s approval to all shareholders, taking into account the following controls:

(A) Announcing the invitation to the general assembly before the date specified for the meeting in accordance with the provisions of Article (174) of the Companies Law

(B) Publish the announcement of the invitation to the meeting on the company’s website and the financial market where the company’s shares are listed.

(C) Notifying shareholders by registered letters or through modern means of technology in accordance with what is stipulated in the articles of association.

(D)  Notify SCA and the competent authority with a copy of the invitation papers before publication.

With the exception of the postponed general assembly meeting due to the lack of quorum in accordance with the provisions of Article (183) of the Companies Law, the invitation to convene the general assembly meeting shall be after the approval of the SCA to all shareholders, taking into account the following controls:

(A)  Announcing the general ssembly invitation before the meeting date in accordance with the provisions of Article (172) of the Companies Law.

(B)  Publishing the meeting invitation in two local Arabic-language daily newspapers.

(C)  Notifying the shareholders by registered letters or by sending SMS and e-mails” if any” as in accordance with the articles of association.

Notify SCA and the competent authority with a copy of the invitation papers before publication.

Article 43(2)

Term of delegation given to the Board of Directors by way of a General Assembly resolution

The reference to provision 232 of Federal Decree by Law No (32) of 2021 Concerning Commercial Companies as amended has been added.

Notwithstanding the above, the previous decisions issued by shareholders owning at least 75% of the company’s capital at a meeting of the company’s shareholders that was held before enacting the provisions of the Companies Law to issue bonds or sukuk shall be valid and effective as if they were taken by a special decision by the shareholders of the company after the implementation. In accordance with the provisions of the Companies Law and without the need to issue a new special resolution or adhere to the periods specified above or in Article (232) of the Companies Law, provided that the company’s general assembly does not cancel the authorization decision issued to the board of directors.

Notwithstanding the provisions above, previous resolutions issued by shareholders who own not less than 75% of the company’s capital at a meeting of shareholders that was held before enacting the provisions of the Companies Law to issue bonds or sukuk shall be valid and effective as if they were taken by a special resolution by the shareholders of the concerned company after enacting the companies law and without the need to issue a new special resolution or commit to the periods specified above or in article (230) of the companies law, provided that the general assembly of the company has not canceled the resolution of delegation granted to the board.

Article 44(3)

Arrangements of the General Assembly meeting

General assembly details must be announced on both the company’s website and on the company’s webpage on the market.

The date and venue of the general assembly meeting must be announced on the company’s page on the financial market’s website and on the company’s website.

The date and place of the meeting of the general assembly shall be announced on the company’s website.

Article 45 (First)

Inclusion of an agenda item during the general assembly meeting

Article 45 (First) has been deleted.

All of “First” was deleted.

First: Before the general assembly meeting and after the invitation publication:

The shareholders shall be entitled to apply for listing a new item(s) to the general assembly agenda before the general assembly meetings and after invitation publication according to the following conditions.

1. The listing application shall be submitted by a number of shareholders representing 5% of the listed company capital.

2. The listing application shall be submitted to the SCA within five days from the date of publishing the general assembly invitation by the company.

3. The new item shall be clear and specific and shall not contradict the provisions of the Companies Law or the resolutions and regulations issued for its implementation.

4. The listing application shall be in writing and signed by its applicant.

5. The company shall notify the shareholders with the application for listing the new item(s) in the same manner the general  assembly meeting invitation  is sent or in any other manner the SCA deems appropriate, at least (5) five days before the date set for holding the general assembly. The notice shall include the new item and the related documents.

Article 45 Second

Inclusion of an agenda item during the general assembly meeting

The heading has been deleted.

Deleted the heading.

Second: During the general assembly meeting:

Article 45 Second

(1) A

Inclusion of an agenda item during the general assembly meeting

Shareholders representing 5% of the company’s share capital can request an agenda item to be added during the general assembly meeting.

During the general assembly meeting, the shareholders shall be entitled to submit a request to add new item(s) to the general assembly meeting agenda in accordance with the following conditions:

(a)  The request to add an agenda item shall be submitted by a number of shareholders representing 5% of the Company’s share capital.

During the general assembly meeting, the shareholders shall be entitled to submit a request to add new item(s) to the general assembly meeting agenda in accordance with the following conditions:

(a)  The request to add an agenda item shall be submitted by a number of shareholders representing 10% of the Company’s share capital.

Article 45 Second

(2)

Inclusion of an agenda item during the general assembly meeting

In case a new agenda item for a general assembly is being proposed, and it requires a special resolution or is related to the removal of at least one board members, the request must include / fulfil certain criteria, for example: (a) agenda item must have been submitted to SCA at least 10 days before the general meeting; (b) there is an emergency that requires inclusion of the item; (c) fulfilling all requirements for issuing the special decision related to the request to include the new item; (d) The SCA has no objection to the request to present the inclusion of the item to the general assembly; and (e) the company shall disclose the request to list the item three days before the date of the general assembly meeting if all the above conditions are met.

Taking into account what is stated in Clause (1) of this Article, if the request to include a new item on the agenda of the general assembly requires the issuance of a special resolution or is related to the removal of all or some members of the company’s board of directors, then in this case the request to include the item to the general assembly must be presented following:

(a) The agenda item to be included must have been submitted to the SCA at least ten days before the General Assembly meeting.

(b) There is an emergency that requires inclusion of the item.

(c) Fulfilling all requirements for issuing the special decision related to the request to include the new item.

(d) The SCA has no objection to the request to present the inclusion of the item to the General Assembly.

(e) The company shall disclose the request to list the item three days before the date of the general assembly meeting if all the above conditions are met.

No new item shall be listed in the general assembly agenda in the following cases:

                    a-     If a decision related to the new item requires a special resolution from the General Assembly.

If the new item relates to dismissal all or part of the Company’s board Members

Article 48(2)

Investors Relations

The shareholder shall be entitled to all rights associated with the share in accordance with the Companies Law.

The shareholder shall be entitled to all rights associated with the share in accordance with the Companies Law.

The shareholder shall be entitled to all the rights associated with the share according to the provisions of the Companies Law, particularly the following:

(A)  The right to obtain a share in the profits to be distributed.

(B)  The right to obtain a share in the company’s assets upon liquidation.

(C)  The right to attend meetings of the General Assembly and participate in the discussions and vote on its decisions.

(D)  The right to dispose shares.

The right to review the company’s financial statements and reports, records, and documents.

Article 51 (3)(c)

Investor Relations

The integrated report is to be published on the Company’s website.

The integrated report as required under the Governance Code.

The corporate governance reports.

Article 53 (3)

Board Committees

The following statement has been deleted: “If the board members are five or less, the board may combine the audit and risk committees.”

Deleted.

If the board members are five or less, the board may combine the audit and risk committees.

Article 56 (3) (1)

Executive Committee  

It is permissible for other members of the board of directors to attend the executive committee meetings with a permission from the chairman of the executive committee.

A member of the executive committee may not be represented by proxy in the meetings by any other member of the executive committee. It is permissible for other members of the board of directors to attend the committee meetings with taking permission from the chairman of the executive committee.

A member of the executive committee shall attend all committee meetings and may not be represented by a proxy in the meetings by any other member of the executive committee.

Article 58 (2)

Board Permanent Committees

Permanent committees include the nomination and remuneration committee and the audit committee. Each of these must include at least three non-executive board members and a maximum of five members, of whom at least two members shall be independent board members. The chairman must be independent, and the chairman of the board may not be a member of any committee.

The permanent committees consist of: (1) the nomination & remuneration committee; and (2) the audit committee. The board permanent committees shall consist of at least three non-executive board members and a maximum of five members, of whom at least two members shall be independent board members regardless of the total committee membership. The committee shall be chaired by an independent board member. The chairman of the board of directors shall not be a member of any committee. The board of directors shall notify non-executive board members of the committees in charge of the duties that may result in conflicts of interest, such as verification of the integrity of financial and non-financial reports, review of transactions concluded with stakeholders, selection of executive board members and setting remunerations and review the transactions concluded with the interest holders.

The permanent committees consist of: (1) the nomination & remuneration committee; and (2) the audit committee. The board permanent committees shall consist of at least three non-executive board members, of whom at least two members shall be independent board members regardless of the total committee membership. The committee shall be chaired by an independent board member. The chairman of the board of directors shall not be a member of any committee. The board of directors shall select non-executive board members of the committees in charge of the duties that may result in conflicts of interest, such as verification of the integrity of financial and non-financial reports, review of transactions concluded with stakeholders, selection of executive board members and setting remunerations and review the transactions concluded with the interest holders.

Article 59

Nomination & Remuneration Committee

All members of the nomination and remuneration committee must have experience and competence in the committee’s scope of work, such as financial, legal or administrative.

The board of directors shall form a permanent committee called the nominations and remunerations committee.

All members of the nomination and remuneration committee must have experience and competence in areas that serve the committee’s scope of work (for example, but not limited to: financial, legal, administrative, or executive expertise…).

Such committee shall convene its meetings once annually or as required, and its duties shall be as follows.

The board of directors shall form a permanent committee called the nominations and remunerations committee. Such committee shall convene its meetings once annually or as required, and its duties shall be as follows.

Article 59 (5)

Nomination & Remuneration Committee

If the nomination and remuneration committee finds out that a board member has lost independence, it must bring this to the attention of the board and must notify the member via a letter to his/her registered address. Such member must reply within 15 days of receiving the letter, after which the board will issue its decision.

If the nomination and remuneration committee finds out that one of the members has lost independence, the committee shall bring the issue before the board of directors to notify the member by a registered letter at his/her registered address at the company, clarifying the reasons for the loss of independence; such member shall reply to the board of directors within (15) fifteen days from the date of receiving the notice thereof, and the board of directors shall issue a decision as to whether such member is independent or otherwise in its first meeting following reception of the board member’s reply or elapse of such period without receiving a reply.

If the nomination and remuneration committee finds out that one of the members has lost independence, the committee shall bring this issue before the board of directors to notify the member by a registered letter at his/her registered address at the company, clarifying the reasons for the loss of independence; such member shall reply to the board of directors within (15) fifteen days from the date of receiving the notice thereof, and the board of directors shall issue a decision as to whether such member is independent or otherwise in its first meeting following reception of the board Member’s reply or elapse of the period mentioned in above without receiving a reply.

Article 59(7)

Nomination & Remuneration Committee

Setting the employees’ and board members’ financial compensation, and reviewing the policy annual to ensure that the senior executive management’s compensation are reasonable and in line with the company’s long term performance.

Setting the policy for granting bonuses, privileges, incentives, and salaries to the company’s board members and employees, and to review such policy annually, and to ensure that the bonuses and privileges offered to the senior executive management are reasonable and in line with the company’s performance on the long term.

Setting the policy for granting bonuses, privileges, incentives, and salaries to the company’s board members and employees, and to review such policy annually, and to ensure that the bonuses and privileges offered to the senior executive management are reasonable and in line with the company’s performance.

Article 59(13)

Nomination & Remuneration Committee

Creating an updated follow-up and succession plan for the work of the company’s senior executives, chairmen of board of directors’ committees.

Ensuring the existence of an appropriate and updated plan for the continuation and follow-up of the work of the company’s senior executives and chairmen of the board of directors’ committees.

Note: A new article has been added under 59(13) (see column to the right), and the previous Article 59(13) has been moved up one subsection to become Article 59(14) (shown below).

N/A

Article 60(1)

Audit Committee

The board must form a permanent committee called the audit committee, all members of which must possess knowledge in financial and accounting matters, with at least one member having practical work experience in either field, or a university degree or professional certification. If no such member exists, one or more committee members may be appointed from outside the company.

The board of directors shall form a permanent committee called the audit committee. All committee members shall possess knowledge in financial and accounting matters and one of them at least shall have practical work experience in accounting or finance fields or shall have a university degree or a professional certificate in accounting or finance or other relevant fields. One or more of the committee members may be appointed from outside the company if none of the board members has required experience.

The board of directors shall form a permanent committee called the audit committee. All committee members shall possess knowledge in financial and accounting matters and at least one of them shall have practical work experience in the accounting or finance fields or shall have a university degree or a professional certificate in accounting or finance or other relevant fields. One or more of the committee members may be appointed from outside the company in case the available number of non-executive board members is insufficient.

Article 61 (4)

Audit Committee Duties

Considering any important and unusual items/matters that are or shall be mentioned in such reports and accounts and the items outside of the balance sheet (off-balance sheet items), the audit committee shall also pay the required attention to any issues brought up by the financial manager, or the acting financial manager, compliance officer, or the auditor.

Considering any important and unusual items/matters that are or shall be mentioned in such reports and accounts, the committee shall also pay the required attention to any issues brought up by the financial manager, acting financial manager, compliance officer, or auditor.

Article 61 (11)

Audit Committee Duties

Ensuring timely response from the board and senior management to queries into substantial matters highlighted in the auditor’s letter.

Ensuring timely response from the board of directors and senior management to inquiries for illustration and substantial matters mentioned in the auditor’s letter.

Ensuring timely response from the board of directors to inquiries for illustration and substantial matters mentioned in the auditor’s letter.

Article 61(18)

Audit Committee Duties

Setting rules to allow staff and stakeholders to confidentially report potential violations in financial or other matters, and establishing procedures to grant protection to the reporting individual.

Setting the rules that enable the company’s staff and the stakeholders to confidentially report any potential violations in financial reports or the internal audit, or any other issues and the procedures sufficient for conducting independent and fair investigations concerning such violations, and establishing procedures to grant protection to the reporting person and ensure its implementation accurately.

Setting the rules that enable the company’s staff to confidentially report any potential violations in financial reports, internal control, or any other issues and the procedures sufficient for conducting independent and fair investigations concerning such violations.

Article 61 bis

Audit Committee Duties

The audit committee must include an audit committee report within the corporate governance report. Such report shall include significant matters reviewed by the committee concerning the company’s financial statements, along with a description of the evaluation process of independence and effectiveness of the external audit process.

The audit committee chairman must attend the general assembly meetings to address any queries raised by the shareholders on such report.

Audit committee report

1-     The audit committee prepares an annual report on the audit committee’s activities, to be endorsed by the chairman of the audit committee and to be included as a standalone report with the company’s annual corporate governance report, adhering to the guidelines outlined under this governance code. Additionally, the chairman of the audit committee is required to attend the annual general assembly meeting to address any inquiries related to the audit committee’s annual report.

2-     Such annual report shall include the following:

a-      Significant matters reviewed by the committee concerning the financial statements and the measures taken to address them.

b-     A description of the evaluation process of the independence and effectiveness of the external audit process, along with insights into the methodology used in selecting or re-appointing the external auditor, including the duration of the current audit firm’s tenure.

c-      A statement detailing the committee’s recommendation concerning the selection, reselection, or removal of the external auditor, along with the board’s rationale for not accepting or implementing that recommendation by the management.

d-     A description of the methods employed to safeguard the independence of the external auditor when they offer services beyond the scope of auditing the company’s accounts.

e-     Steps that the committee has implemented or plans to implement to rectify any shortcomings or vulnerabilities in cases of oversight failures, either related to internal controls or risk management.

f-       Evidence that the committee has reviewed all medium- and high-risk reports issued by internal audit to determine if they arise from major failures or weaknesses in internal control.

g-      Detailed information about the remedial action plan in cases of significant deficiencies in the domains of risk management and internal control systems.

Evidence that the committee reviewed all transactions concluded with related parties and their observations or decisions, and the extent to which they complied with the applicable laws in this regard.

N/A

Article 63(1)

Risk Committee

A risk committee may be formed consisting of a minimum of three and a maximum of five non-executive members

The board of directors may form a permanent risk committee, comprising of non-executive board members. Not less than three members and not exceeding five members, all of whom are required to have sufficient knowledge pertaining to the risks related to the company’s activities.

The board may form a permanent committee responsible for the risks. The members of such a committee shall have sufficient knowledge to manage the risks related to the company’s activities.

Article 63 bis

Governance Committee

A governance committee may be formed, and the board is responsible for overseeing, implementing and evaluating the rules that apply to it. The board may also establish a permanent committee responsible for executing the company’s governance framework, which would be comprised of non-executive board members between three to five members. If the existing board does not meet the experience required, an external member may be appointed. The committee must provide the board with annual reports and recommendations on a variety of matters, such as compliance, regulatory requirements, latest global governance trends, and preparing the annual governance report.

Governance committee:

1-     The board of directors formulates governance rules for the company that are in alignment with the mandatory provisions of this guide. Additionally, the board is responsible for overseeing, implementing, and evaluating the efficacy of these rules.

2-     The board of directors has the option to establish a permanent committee responsible for executing the company’s governance framework. This committee must be comprised of non-executive board members, with a minimum of three members and a maximum of five members. All committee members must possess a significant level of leadership expertise and a deep understanding of governance standards.

3-     An external member may be appointed in the committee if the current board of directors’ members do not meet the experience requirement.

4-     The governance committee is obligated to furnish the board of directors with annual reports and recommendations, which encompass the following responsibilities:

a-      Verifying the company’s compliance with the Governance Code issued by SCA.

b-     Reviewing and updating governance rules in accordance with regulatory requirements and international best practices in the field of governance.

c-      Ensuring that board members are kept abreast of advancements in the realm of corporate governance and the latest global best practices in this field.

Preparing the annual corporate governance report issued by the company, provided that the requirements contained in this decision are adhered to.

N/A

Article 67(1)(D)

Risk Management

The internal audit function may not be combined with any other function within the company.

The internal audit function may not be combined with any other function within the company.

N/A

Article 69(5)

Compliance Officer

The role of the compliance officer cannot be combined with any other position within the company.

The role of the compliance officer cannot be combined with any other position within the company.

The role/function of compliance officer may be combined with the internal auditing function.

Article 72

Prohibited Acts on Auditors

An auditor must not perform, during an audit/review of the company’s accounts, any services or activities that contravene the terms and guidelines, notably those outlined in the International Code of Conduct for Accountants (IESBA) established by the International Ethical Standards board for Accountants.

While performing an audit/review of the Company’s accounts, the auditor shall not perform any additional technical, administrative or consultation services or works in connection with its assumed duties that may affect its decisions and independence; or any services or works that the SCA decides that an auditor shall not perform during the performing of an audit/review of the Company’s accounts, or any services or activities that contravene the terms and guidelines, notably those outlined in the International Code of Conduct for Accountants (IESBA) established by the International Ethical Standards board for Accountants. in particular:

(1) (B) The total value of such services shall not surpass 10% of the fees charged by the company’s auditor for conducting the audit of its financial accounts for the fiscal year; and

While performing an audit/review of the company’s accounts, the auditor shall not perform any additional technical, administrative or consultation services or works in connection with its assumed duties that may affect its decisions and independence; or any services or works that the SCA decides that an auditor shall not perform during the performing of an audit/review of the company’s accounts, in particular:

(1)(B) These services are clearly immaterial for the auditor and the Subsidiary company.

Article 73(4)

Permitted Consultations by the Auditor

The auditor may issue a sperate report opining on the company’s control framework and its effectiveness or the deficiencies that should be addressed.

The auditor may issue a sperate report, assessing the company’s internal control systems and their alignment with the internal control framework, determined by the board of directors. This report will contain the auditor’s opinion on the effectiveness of the internal control systems and may highlight any deficiencies that need to be addressed, prompting necessary corrective actions.

N/A

Article 76(1)

Disclosure of Integrated Report

Disclosure of Integrated Report must be prepared within the first 3 months from the beginning of the financial year and 10 days prior to the annual general meeting whichever comes first.

In addition to the audited financial statements and non-financial information, the company shall disclose the integrated report within the first 3 months from the beginning of the financial year and 10 days prior to the annual general meeting whichever comes first.

In addition to the audited financial statements and non-financial information, the company shall disclose the integrated report.

Article 76(3)

Disclosure of Integrated Report

This clause has been deleted.

The integrated report shall be disclosed through any of the following two methods:

(A)  High-level report containing detailed reports including the financial and operational matters that affect positively on the company’s ability to create value creation.

Disclosing a distinct, prominent, and accessible part of another report which also includes the annual financial statements and other reports.

Article 77(1)

Corporate Governance Information

The Governance report to be signed in accordance with the form prepared by SCA.

The company shall submit a governance report signed in accordance with the form prepared by SCA and which is available on SCA’s and market’s website.

The company shall submit a governance report signed by the chairman in accordance with the form prepared by SCA and which is available on SCA’s and market’s website.