1. INTRODUCTION

1.1. This Charter outlines the roles and authorities of the Board of Directors (the “Board”) of Almoayed Investments B.S.C (c) (“Almoayed Investments” or the “Company”), its specific responsibilities to enhance coordination and communication with the Management of the Company and its subsidiaries, and its fiduciary duties of care and loyalty to the Shareholders.

1.2. The Board reports to and is accountable to the Shareholders of the Company.

1.3. The powers and duties of Board members are set out in the constitution and the responsibilities and principles stated in this Charter should be read in conjunction with the Company’s other governance documents and its Memorandum of Association (“MOA”) and Articles of Association (“AOA”).

1.4. This Charter further defines the specific responsibilities of the Board, in order to enhance coordination and communication between the Management and the Board and more specifically, to clarify both Board and Management accountability for the benefit of the Company and its Shareholders.

1.5. The Board may exercise its powers except where it is limited by the law, this Charter, the MOA, and/or the AOA.

2. BOARD OPERATING STRUCTURE

2.1. The Board is responsible to supervise the management of the business and affairs of the Company, and as well as that of its subsidiaries (referred to collectively as the “Group”).

2.2. The Board shall assume nomination and remuneration responsibilities, and shall not have separate committees for nomination and remuneration. Corporate Governance responsibilities will be taken care of by the Audit Committee (“AC”).

2.3. Each subsidiary shall have its individual Board of Directors, which will functionally report to the Board of Almoayed Investments.

3. MEMBERSHIP

3.1. The Board shall consist of five (5) members, representing the current five shareholders. The membership may be increased in future. Board shall review the independent directors’ requirement and decide appropriately.

3.2. The Board shall be appointed, reappointed, or terminated based on recommendations of the Shareholders.

3.3. The Company will issue ‘appointment letters’ to each Board member.

3.4. The Board of Directors shall elect by secret ballot a Chairman and a Vice Chairman for a term of three years and renewable for further duration/s. The Vice Chairman shall chair meetings in the absence of the Chairman.

3.5. The Chairman shall be responsible for the leadership and efficient working of the Board, as well as ensuring that members are adequately briefed in sufficient time for issues arising during its meetings.

3.6. The number of directorships in other companies and/or committees on which a Board member may serve shall be subject to a case-by-case review by the Shareholders, in order to ensure that each member is able to devote sufficient time to perform his or her duties.

3.7. If a director does not attend 75% or more of the Board meetings without a valid excuse, their membership may be withdrawn and the Shareholders may appoint a suitable replacement.

3.8. If the office of one of the board members becomes vacant, it shall be replaced by a member appointed by the Shareholders. The new member shall complete the remaining term of the predecessor.

3.9. If the vacant offices are equal to one quarter of the actual Board composition, the Board shall request the Shareholders to appoint new directors within two months from the last office becoming vacant.

3.10. If the vacant offices are equal to one half of the actual Board composition, the Board shall be deemed to be ‘dissolved’, and the Shareholders shall appoint a new Board.

4. COMPOSITION

4.1. The Board shall comprise a mix of executive and non-executive directors, defined as follows.
 4.1.1. Executive Members: Directors who perform management duties and/or are full-time employees of the Company.
4.1.2. Non-Executive Members: Directors who are neither employees nor hold any executive responsibilities in the Company.
4.1.3. Independent Members: Directors who satisfy all the conditions listed in the Corporate Governance Code of Bahrain required for a director to be deemed independent. An independent director is one who does not have any direct or indirect material financial relationships or transactions with the company (not counting director’s remuneration for this purpose). Such directors must not be or have been an employee of the Company, and must not hold more than 10% shares in the Company.
4.2. The Board will ensure independence and objectivity in its decision-making process. In the absence of independent directors, Almoayed Investments will establish procedures to manage conflicts of interest.
4.3. The Board shall periodically assess its composition and size and, where appropriate, propose to the General Assembly of the Shareholders to reconstitute itself and/or its committees.
4.4. To establish clear a balance of power and authority, the role of Chairman shall be assigned to a non-executive member. Accordingly, the roles of Board Chairman and Managing Director of the Company shall not be exercised by the same person.

5. SECRETARY

5.1. The Board shall appoint the Board Secretary, and shall determine the Board Secretary’s duties. Whenever practical, it is recommended the secretary be a person with legal or similar professional experience and training.
5.2. The Board Secretary shall ascertain, at the beginning of each meeting, the existence of any conflicts of interest and minute them accordingly.
5.3. The Board Secretary should be accountable to the Board through the Chairman on all matters relating to their duties as an officer.
5.4. The Board Secretary shall ensure that the Company complies with Almoayed Investments’ corporate governance framework and by-laws, and shall act as a confidant to the Board Chairman, promoting strong corporate governance practices.

6. MEETINGS AND ATTENDANCE

6.1. The Board shall meet at least four times in each financial year, and it is expected that the meetings will be convened on a quarterly basis.
6.2. A provisional date for meetings will be agreed upon at the end of each regular meeting or at the start of the financial year.
6.3. The Board of Directors shall meet upon an invitation from the Chairman or the Vice Chairman or from at least three of its members at the Company’s head office or any other place determined by the Board.
6.4. The duration of the meetings will depend on the agenda to be discussed.
6.5. The Board Secretary shall prepare and distribute notice of the meeting to all those required to attend.
6.6. The Board may make decisions, except for the approval of the Company’s financial statements, by mail, electronically, by fax, by conference calls, by video conference, or any other means of video or audio communications.
6.7. Attendance by proxy is permitted.
6.7.1. Members may give proxy to any other member of the Board.
6.7.2. A proxy can only represent a maximum of one Board member, provided that the number of members (including the Chairman and Vice Chairman) present for the meeting is not less than 50%.
6.7.3. A member should submit be in writing to the Secretary of the Board, their nomination for proxy at least three days before the meeting.
6.8. A duly convened meeting of the Board at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions vested in, or exercisable by, the Board.
6.9. The quorum shall be considered to be attained with the attendance of at least half the members including the Chairman and Vice Chairman.
6.10. The Board may invite senior management of the Company and/or its subsidiaries to attend.

7. NOTICE AND AGENDA OF MEETINGS

7.1. The Board Chairman, in conjunction with the Board Secretary, shall undertake the primary responsibility for preparing the notice of the meeting, its agenda and corresponding documents.
7.2. The notice for meetings should be given at least five days prior to the meeting. Shorter notices may be approved by the Board.
7.3. Notices shall state the date, time, agenda (including corresponding documents), and place of the meeting. Where there is a need to table a report, a brief summary of findings and/or recommendations should be provided.
7.4. A record of submissions and materials presented to the Board shall be maintained and held by the Board Secretary together with minutes of meetings. All such records shall be accessible to members of the Board and the Shareholders.

8. VOTING RIGHTS

8.1. Only members of the Board may vote on matters requiring a Board resolution. Non-member attendees are not permitted to participate in the voting process.
8.2. All decisions of the Board will be based on a simple majority of votes of the members present at the meeting. Each person shall have one vote and, in the event of a tie, the Chairman (or Vice-Chairman in the absence of the Chairman) of the Board will have a casting vote.
8.3. Proposed resolutions by circulation should be circulated to all Board members (100%) and shall be adopted by physical signature or e-mail confirmation by all the members. Such circular resolutions should be tabled at the subsequent Board meeting for ratification. Briefing calls from the respective department for decisions by circulation should take place, if necessary, to the Directors.

9. MINUTES OF MEETINGS

9.1. Minutes of the meetings are recorded by the Board Secretary. Board members formally sign-off the minutes at its subsequent meeting.
9.2. A copy of the minutes of meeting shall be maintained with the Board Secretary.
9.3. The minutes shall record the names of directors present and those who are absent. The minutes shall also include the names of the persons or non-members who were present and/or absent.
9.4. The Board Secretary shall ascertain, at the beginning of each meeting, the existence of any conflicts of interest and minute them accordingly.
9.5. The minutes shall embody a summary of the deliberations of the Board covering every event that took place at the meeting and any matter that the members had required to be recorded in the minutes.
9.6. Directors dissenting from resolutions decided by the Board shall, upon their written request, have their disagreements recorded in the minutes of the relevant meeting.

10. AUTHORITY

10.1. The Board shall serve as the decision-making body of the Company and its subsidiaries, except for matters reserved for the Shareholders.
10.2. The Board may delegate any of its powers, authorities and discretions (with power to sub-delegate) to a committee consisting of two or more persons, however, the Board exercises its supervisory responsibilities through such specialized committees. Where a committee is formed, specific terms of reference of the said committee would be established by the Board to cover matters such as the purpose, composition and functions of the committee.
10.3. The Board may retain or exclude its right to exercise the delegated powers, authorities or discretions collaterally with the committee.
10.4. The Board may at any time revoke the delegation or alter any terms and conditions or discharge the committee in whole or in part.
10.5. The Board has authority to establish and appoint its members to its sub-committees.
10.6. The Board may delegate to the Board of Directors of the Company’s subsidiaries, which shall be outlined in their respective terms of reference and the authority matrix.
10.7. Consistent with the Board’s power to delegate its responsibilities of the Company’s business, it will review and approve an authority matrix for authorization of expenditures and other corporate actions. The thresholds for the identified areas will depend upon the operating requirements of the Company.
10.8. The Board members shall exercise all powers and duties as delegated to them by the Shareholders.
10.9. The senior management and Board Secretary shall provide the Board with complete access to the Company’s records and personnel.
10.10. The Board may engage professional consultants to support it in achieving its objectives. Such engagements shall be at the expense of the Company, in line with the approved policies and procedures.

11. DUTIES AND RESPONSIBILITIES

11.1. Board of Directors

Delegation of authorities
11.1.1. Approve the Delegation of Authorities for the Company that sets financial authorities of Management and delegate authorities to certain Board members and / or committees.
11.1.2. Approve financial commitments in excess of delegated authorities.
Corporate Governance
11.1.3. Approve policies of the Company for developing the Company’s approach to corporate governance.
11.1.4. Approve the organizational and management structure and responsibilities,
11.1.5. Oversee the selection, compensation and/or replacement of senior management,
11.1.6. Approve the appointment and replacement of the Managing Director for the Company. If a family member is to be appointed as the Managing Director, it has to be approved by the Family Council.
11.1.7. Establish a sound whistle-blowing policy, with necessary safeguards to protect whistle-blowers.
11.1.8. Review and approve the corporate social responsibility agenda in light of Company’s business objectives, as well as the expectations of its stakeholders.
11.1.9. Ensure that principal risks, legal, and compliance requirements, including anti-money laundering procedures, are identified and appropriate systems have been implemented to manage such risks and requirements.
11.1.10. Ensure that necessary insurance policies are in place, including directors’ and officers’ liability insurance.
11.1.11. Ensure that Board composition and way of working complements the day-to-day work and operations of the Company.

Strategic and Performance Management

11.1.12. Provide strategic direction to Almoayed Investments, including setting the vision and mission for the Group companies.
11.1.13. Review and guide corporate strategy and the long-term strategic direction of the Company.
11.1.14. Monitor major plans that could potentially affect areas such as governance, ownership, risk exposure, and budgets.
11.1.15. Oversee and approve on an ongoing basis, the Group’s business strategy and strategic planning process.
11.1.16. Approve the annual budget and business plan and recommending the annual financial statements to the Shareholders.
11.1.17. Establish controls, and oversee the actions of the Board of Directors of its subsidiaries, development of and decision on building a robust business strategy and long-term profitability, while safeguarding the interests of the Shareholders.
11.1.18. Act as a challenging partner to the Board of Directors of the subsidiaries, and question and scrutinize the way the subsidiaries are managed.

Family Governance

11.1.19. Recommend to the Family Council on appointment of family members for employment within the Almoayed Investments Group.
11.1.20. Approve the appointment of non-family members in senior management positions within the Group and notify the Family Council.
11.1.21. Recommend to Family Council for approval of loans to family members.
11.1.22. Recommend to Family Council for approval of spending on charitable causes.
11.1.23. Recommend to Family Council the allocation of funds to be transferred to the Family Office, if established.

Financial Management

11.1.24. Approve the annual budget and targets, borrowing/financing plans and deal structures of the Group. Monitor the financial performance and ensure that financial results are reported fairly and in accordance with IFRS.
11.1.25. Recommend to shareholders the annual report / financial statements released by the Company’s management and ensure that any reports issued by the Company, including the financial statements, present a ‘true and fair’ view of its position and performance.
11.1.26. Endorse the appointment of the External Auditors for approval by the Shareholders.
11.1.27. Recommend proposed dividends and the dividend policy to the Shareholders for approval.

Investments

11.1.28. Oversee and monitor major acquisitions, mergers, divestments and the sale of large assets, to ensure that they are in the best interests of the Group, its Shareholders and its stakeholders.
11.1.29. Approve the investment strategy (including investment policy, rules governing the acquisitions and divestment of the Company’s assets and those of its affiliates, and guidelines determining the provision of loans, guarantees and financial assistance to such affiliates) of the Group.
11.1.30. Keep the Shareholders informed of decisions taken by the Board, prior to executing the strategy.

Internal Controls and Risk Management

11.1.31. Ensure that the Group’s operations, individually and collectively are measured, monitored and controlled by appropriate effective and prudent risk management framework/system that commensurate with the scope of the Group’s activities and are supported by an appropriate control environment.
11.1.32. Review compliance systems to ensure compliance with legislation including relevant filings and compliance with the accounting standards.
11.1.33. Ensure Management is accountable for the security of information systems and applications, and the business continuity and disaster recovery plans.
11.1.34. Confirm with External auditor any fraud, illegal acts, deficiencies in internal control or other similar issues and ensure that audit / control recommendations by external auditors are promptly implemented.

Financial Reporting

11.1.35. Monitor the integrity of the Company’s financial statements (including annual and interim reports, preliminary result announcements and any other formal announcements relating to the Company’s financial performance), reviewing significant financial reporting issues and judgments which they contain.
11.1.36. Review and challenge, where necessary, the consistency of, and any changes to, accounting policies, practices of the Company and its subsidiaries.
11.1.37. Review proposed professional and regulatory pronouncements regarding accounting policies and financial reporting and assess their impact on the Company’s and subsidiaries’ financial statements.
11.1.38. Recommend financial statements to the Shareholders for approval.

Related Party Transactions

11.1.39. Approve the Related Party Transactions Policy which defines related parties, related party transactions and approval requirements for executing related party transactions.
11.1.40. Approve entering into agreements with related parties, after assessing the potential conflict of interest and the safeguards for it, prior to implementation.
11.1.41. Report to the Shareholders at the Annual General Meeting of the transactions and contracts in which any Director or Senior Management member has an interest, in line with the requirement stated in the Related Party Transactions Policy.

Shareholders Meetings

11.1.42. Issue invitations to the Shareholders and external auditor to attend shareholders’ meetings.
11.1.43. Providing Shareholders with timely information to be able to take decisions at the General Assembly.
11.1.44. The Board Chairman and the Chairs of the other board committees shall attend the General Assembly Meeting in order to respond to Shareholders’ enquiries.

11.2. Board Chairman

11.2.1. Provide leadership to Board, chair Board meetings and ensure that the appropriate issues are addressed.
11.2.2. Plan Board meetings and agendas, and coordinating the agenda, information packages and related events for Board meetings in conjunction with the Board Secretary.
11.2.3. Act as primary counsel to the Managing Director or CEO.
11.2.4. Ensure the Board has full knowledge of the Company’s business affairs and obligations to the Shareholders, regulatory authorities and other stakeholders.
11.2.5. Ensure management strategies, plans and performance are appropriately represented to the Board.
11.2.6. Maintain liaison and communication with all directors and committee chairs, to coordinate input from Directors, and optimize the effectiveness of the Board and its committees, if any.
11.2.7. Define a work plan for the Board, apportion its work, and be aware of its general performance.
11.2.8. Foster a constructive and harmonious relationship between the Board and management.
11.2.9. Ensure the Shareholders is adequately informed of the performance of the Company, and that the Shareholders’ meetings are efficiently and effectively organized with the assistance of the Board Secretary.
11.2.10. Act as lead representative and primary spokesperson of the Company.
11.2.11. Collaborate with the Vice Chairman to ensure that the Board is able to operate independently of management as required.

12. MATTERS RESERVED

12.1. A formal schedule of reserved matters shall require in some instances the Board’s approval and in other instances the shareholder’s approval. This is addressed in the authority matrix.

13. REMUNERATION

13.1. Remuneration policy of Board, and that of its subsidiaries will be determined and approved by the Shareholders.
13.2. The General Assembly shall fix the remuneration of the Board and subject to regulatory requirements where applicable.
13.3. As required by the Ministry of Industry, Commerce and Tourism (MOICT), the General Assembly shall fix the remuneration of the Board provided that the total of such remuneration does not exceed 10% of the net profit in any one financial year after allowing for statutory reserves and after allowing for the distribution to the partners of a dividend totaling not less than 5% of the capital of the Company. This provision shall not be deemed to oblige the Company to pay or declare a dividend of 5% or at all.
13.4. The General Assembly may resolve to pay annual remuneration to the Board even in the years where no profit is realized or distributed as dividends, provided that such payment is approved by the MOICT.

14. CODE OF CONDUCT

14.1. All directors must act ethically at all times and adhere to the Code of Conduct of the Company.
14.2. Where a potential conflict of interest arises for a director, they have a fiduciary responsibility to notify the Board of such conflict (direct or indirect) in any matter under deliberation.
14.3. All directors must abstain from any discussion or decision affecting their business or personal interests. Any such transactions conducted without the explicit prior approval of the Board shall be deemed null and void.
14.4. The Board shall review the independence of each independent director at least annually in light of interests disclosed by them. Each independent director shall provide the Board with all necessary and updated information for this purpose.

15. MEMBERS’ LIABILITY

15.1. The Board members shall be liable to the Company, the Shareholders and third parties for any violation of the provisions of the Company’s Articles of Association.

16. PERFORMANCE EVALUATION

16.1. The Board, through self-assessments, shall perform an evaluation of itself, the individual directors and its committees, on an annual basis. Results of the self-assessment shall be communicated to the Shareholders.
16.2. Non-executive and independent members of the Board that serve more than two terms shall be subject to evaluation, to determine their level of independence.

17. INDUCTION AND TRAINING

17.1. The Board shall put in place an induction and ongoing training program, upon their appointment, to ensure that directors are made fully aware of their responsibilities, and have proper understanding of the manner in which the Company operates.
17.2. Board members shall periodically receive materials or briefing sessions on subjects that would assist them in discharging their duties as Board members and ensure that their knowledge and understanding of the Company’s business remain current.

18. AMENDMENTS TO THIS CHARTER

18.1. This Charter should be reviewed at least once in 2 years for updates, by the Board, and approved by the Shareholders.
18.2. Amendments, if any, may be effected by a majority vote cast by the members of the Board present at any meeting, on condition that the proposed amendments should not be in conflict with the Company’s Articles of Association, and the applicable laws and regulations referred to above.

19. CONFIDENTIALITY

19.1. Board Members and invitees who attend the Board meetings must maintain confidentiality on all documents they receive, on the contents of deliberations and on all confidential information of the Company and its customers, particularly operating and business information that are disclosed to them in the course of their work on the Board.

20. CORPORATE INDEMNITY AND DIRECTORS INSURANCE

20.1. Board members have fiduciary duties to the Company, which can expose them to personal liability. Attracting qualified Board members and protecting them in their legitimate activities requires that corporate indemnity and insurance be available.
20.2. The Company will indemnify its Board members, for claims arising from their activities as such if they acted in good faith and in a manner they reasonably believed was not unlawful and was not opposed to the best interest of the Company.