Neyriz White Cement Company

Corporate Governance Procedures

Corporate Governance Framework

Efficient corporate governance procedures are vital for the proper functioning of capital markets and the overall economy. Weak corporate governance may erode market confidence, which in turn can lead to capital flight, liquidity crises, and price volatility on the stock exchange. In fact, a company is not only responsible to its shareholders but also to investors and other stakeholders. The company, in line with achieving the highest ethical standards, accurate and transparent communication, and full compliance with applicable laws, regulations, and corporate guidelines, has established specialized committees within the board of directors and has developed relevant charters and regulations.

Company Actions Regarding Corporate Governance Principles

Some of the key actions taken by the company to comply with the requirements of the Corporate Governance Code approved by the Securities and Exchange Organization include:

• Compliance with the provisions of the above-mentioned regulations regarding the non-executive majority of board members and the membership of at least one non-executive member with financial education and relevant experience.
• Preparation and signing of a statement regarding the non-presence of board members as members of boards in more than three companies.
• Developing and implementing an organizational ethics charter within the company.
• Adopting appropriate procedures within the framework of laws and regulations to ensure equal rights for all shareholders, including the right to vote in general assemblies, access to timely and reliable information, sharing in company profits, timely dividend payments, share ownership registration, etc.
• Adhering to Securities and Exchange Organization regulations concerning transactions with related parties, ensuring proper conflict-of-interest controls to protect the interests of the company and its shareholders.
• Establishment of effective internal control mechanisms to ensure the protection of company assets and resources against loss, fraud, and misuse, and to ensure operational efficiency, financial and non-financial reporting quality, and compliance with laws and regulations through the development of policies and procedures and monitoring their execution.
• Establishing an internal audit department according to the rules and regulations of the Securities and Exchange Organization.
• Annual review of internal control systems by the board of directors and publishing the results in a report entitled “Internal Controls Report.”
• Designing and implementing necessary mechanisms to comply with all laws and regulations concerning insider trading by the board of directors.
• Ensuring the company’s compliance with governance regulations regarding determining the salary and benefits of board members and senior executives in line with their performance.
• Creating and maintaining the independence of the Chairman of the Board, ensuring that the Chairman is not also the CEO of the company.
• Preparation and approval of the Board Charter outlining the roles, responsibilities, and powers of the Chairman, CEO, and other board members, as well as the process for scheduling meetings and decision-making.
• Establishing a Board Secretariat responsible for coordinating and documenting board meetings, collecting required information, following up on expert requests from board members, and ensuring compliance with legal responsibilities.
• Holding board meetings at least once a month.
• Adhering to laws and regulations regarding general assemblies and exercising voting rights.
• Publishing all reports according to the law, including interim and annual financial statements, management analysis reports, board activity reports, internal control reports, and independent auditor reports, within the required deadlines on the company’s website.
• Establishing a fair dividend payout schedule ensuring that controlling shareholders do not receive dividends before other shareholders.
• Ensuring the presence of the CEO, board members, and the head of the audit committee at general assembly meetings, especially when the approval of financial statements is on the agenda.
• Taking necessary actions based on the independent auditor’s and legal examiner’s reports and reflecting them in the minutes of the assembly.
• Determining the attendance fees and bonuses for non-executive board members and their approval at the general assembly.
• Providing sufficient opportunities for shareholders to ask questions and interact with the board members during general meetings.
• Disclosure of important information such as the names, complete details, education, experience, professional credentials of the board members and CEO, whether they are executive or non-executive, their independence, shareholding in the company, and the corporate governance practices and structure in the management analysis report.

Sustainability Reporting

In compliance with Article 40 of the Corporate Governance Code and for the purpose of sustainable development and creating mechanisms to assess and evaluate short-term and long-term potential and value, the following actions have been undertaken by the company:

• Social Aspect: The company participates in social activities by timely payment of taxes, insurance premiums, and legal fees to government bodies and other stakeholders.
• Environmental Aspect: Due to the nature of the company’s activities, it follows environmental laws and regulations to protect environmental resources. The environmental actions are reported in the management analysis and board reports.
• Economic Aspect: From an economic perspective, the company’s planning and policies aim at profitability in the coming years, as considered by the board of directors.