AnnualReport

ANNUAL REPORT

2016

Corporate governance rules are represented in the principles, systems and procedures which

achieve the best protection and balance between the Company’s interests, its shareholders and other

stakeholders related to it. The fundamental objective of implementing the corporate governance

rules is underlined by the Company’s being in line with the shareholders’ goals which promotes the

investors’ confidence in the efficiency of the Company’s performance and its ability to face crises, as

the corporate governance rules regulate the methodology of taking all decisions within the Company

and motivate the existence of transparency and credibility for such decisions.

Among the most significant corporate government rules are the protection of shareholders and

separating the executive authority which directs the Company’s businesses from the board of

directors which prepares and reviews the Company’s plans and policies, and thus adds assurance

and promotes the feeling of confidence in dealing, as well as enable shareholders and stakeholders

to efficiently control the Company.

On 27 June 2013, the Capital Markets Authority issued decree No.25 of 2013 in connection with

issuing the governance rules for companies subject to its supervision. The issuing of such rules comes

under the framework of the provision of article No.(40) of the executive regulation of lawNo.7 of 2010

in connection with establishing the Capital Markets Authority and Regulation of Securities Activity,

that the Authority issues a special system for governance. This is in addition to the provisions of article

No.217 of the decree law No.25 of 2012 promulgating the Companies Law and its amendments,

which stipulated that “the concerned regulatory bodies shall lay down the corporate governance

rules for companies subject to their control, in order to achieve the best protection and balance

between the interests of the Company’s management, its shareholders and other related stakeholders.

Further, it illustrates the requirements which should be available in the independent members of the

board of directors.)

Such rules were amended by decree No.48 of 2015 passed on 302015/6/, which have been re-

enacted within Part Fifteen of the executive regulation of law No.7 of 2010 in connection with

establishing the Capital Markets Authority and Regulation of Securities Activity. These rules have

been applied on 302016/6/.

The corporate governance rules addressed a number of fundamental principles and requirements

upon which the principles of corporate government are established, as well as the methodology

of implementing such rules and principles. The methodology illustrates the guideline methods

for the mechanism of proper activation of the governance principles, including the existence of

a balanced structure of the board of directors which comprises non executive and independent

members, outlining the responsibilities and terms of reference of the members of both the board of

directors and executive management, method of selection of candidates to the membership of the

board of directors and executive management, ensuring the integrity of the financial reports, the

necessity of availability of proper systems for risks management and internal control, keenness to

foster professional conduct and ethical values, the significance of the existence of mechanisms for

disclosure and transparency mechanisms, protection of the shareholders’ rights, recognizing the role

of stakeholders and controlling the conflict of interests, promoting and enhancing performance, as

well as stressing on the significance of the social responsibility shouldered by companies.

Keeping in line with the positive moves taken by the Capital Markets Authority through the rules,

regulations and decrees through which it seeks to enhance the work environment, transparency

and protection of shareholders, and as the Company is keen to implement all the laws, legislations,

decrees and practices which are in line with its principles and professional foundations leading the

Company’s work for the interest of its valuable shareholders, the Company always aims at focusing its

efforts through the integrated team to implement all the laws and decrees in the required professional

manner in the specified time.

Building a Balanced Structure of the Board of Directors

ntroduction