Executive
Council Resolution No. (11) of 2022
Approving
the Articles of Association of the
Dubai
Electricity and Water Authority PJSC[1]
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We, Hamdan bin Mohammed bin Rashid Al Maktoum,
Crown Prince of Dubai, Chairman of the Executive Council,
After perusal of:
Federal Law No. (4)
of 2000 Establishing the Emirates Securities and Commodities Authority and
Market and its amendments;
Federal Law by
Decree No. (32) of 2021 Concerning Commercial Companies;
Cabinet Resolution
No. (41C/1M), issued at Session No. (1) convened on 14 January 2022, approving
the exemption of the Dubai Electricity and Water Authority PJSC from compliance
with certain provisions of Federal Law by Decree No. (32) of 2021 Concerning
Commercial Companies;
Law No. (3) of 2003
Establishing the Executive Council of the Emirate of Dubai;
Law No. (27) of
2021 Concerning the Dubai Electricity and Water Authority;
Decree No. (3) of
2021 Concerning the Listing of Stocks of Joint-stock Companies on the
Securities Markets in the Emirate of Dubai;
Decree No. (55) of
2021 Forming the Board of Directors of the Dubai Electricity and Water
Authority PJSC;
Decree No. (56) of
2021 Appointing the Managing Director and Chief Executive Officer of the Dubai
Electricity and Water Authority PJSC;
Resolution No. (3)
of 2022 Concerning Representation of the Government of Dubai in the Companies
it Owns; and
The approval issued
on 26 January 2022 by the Board of Directors of the Securities and Commodities
Authority exempting the Dubai Electricity and Water Authority PJSC from
compliance with certain provisions of SCA Board of Directors Resolution No.
(11/C.B.) of 2016 on the Regulations for Issuing and Offering Shares of Public Joint-stock
Companies; and from compliance with certain provisions of SCA Board of
Directors Resolution No. (40) of 2015 Concerning the Regulations and Procedures
Related to Companies Buying Back Their Shares to Resell Them, and
Based on the
recommendation of the Board of Directors of the Dubai Electricity and Water
Authority PJSC, issued on 4 March 2022, to approve the Articles of Association
of the Dubai Electricity and Water Authority PJSC,
Do hereby issue this Resolution.
Pursuant to this
Resolution, the Articles of Association of the Dubai Electricity and Water
Authority PJSC attached to this Resolution, inclusive of the rules and procedures
set forth therein, are approved.
This Resolution
comes into force on the day on which it is issued, and will be published in the
Official Gazette.
Hamdan bin Mohammed
bin Rashid Al Maktoum
Crown
Prince of Dubai
Chairman of the Executive Council
Issued
in Dubai on 10 March 2022
Corresponding to 7 Shaban 1443 A.H.
Articles
of Association
Dubai
Electricity and Water Authority PJSC
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Introduction
After perusal of:
Law No. (27) of 2021 Concerning the Dubai Electricity
and Water Authority, a public joint-stock company (PJSC) owned by the
Government of Dubai, and having legal personality, financial and administrative
autonomy, and the full legal capacity to conduct its activities and achieve its
objectives, in accordance with the above-mentioned Law No. (27) of 2021, and
these Articles;
Federal Law No. (4) of
2000 Establishing the Emirates Securities and Commodities Authority and Market
and its amendments;
Federal Law by Decree No.
(32) of 2021 Concerning Commercial Companies;
Cabinet Resolution No.
(41C/1M), issued at Session No. (1) convened on 14 January 2022, approving the
exemption of the Dubai Electricity and Water Authority PJSC from compliance
with certain provisions of Federal Law by Decree No. (32) of 2021 Concerning
Commercial Companies;
Law No. (6) of 2011
Regulating Participation of the Private Sector in Electricity and Water
Production in the Emirate of Dubai;
Decree No. (55) of 2021 Forming the Board of Directors of the Dubai
Electricity and Water Authority PJSC;
Decree No. (56) of 2021 Appointing the Managing Director and Chief
Executive Officer of the Dubai Electricity and Water Authority PJSC;
Executive Council
Resolution No. (46) of 2014 Regulating the Connection of Photovoltaic
Generation Units to the Power Distribution System in the Emirate of Dubai;
Securities and Commodities
Authority Board of Directors Chairman Resolution No. (3/C.B.) of 2020 Approving
the Joint-stock Companies Governance Guide; and
The approval issued on 26
January 2022 by the Board of Directors of the Securities and Commodities
Authority exempting the Dubai Electricity and Water Authority PJSC from
compliance with certain provisions of SCA Board of Directors Resolution No.
(11/C.B.) of 2016 on the Regulations for Issuing and Offering Shares of Public
Joint-stock Companies; and from compliance with certain provisions of SCA Board
of Directors Resolution No. (40) of 2015 Concerning the Regulations and
Procedures Related to Companies Buying Back Their Shares to Resell Them,
The Articles of
Association of the Dubai Electricity and Water Authority PJSC are hereby issued
as follows:
Definitions
The following terms and
expressions, wherever mentioned in these Articles, shall have the following meanings
unless the context implies otherwise:
|
UAE: |
The United Arab
Emirates. |
|
Emirate: |
The Emirate of Dubai. |
|
Government: |
Government of Dubai. |
|
SCA: |
The Securities and
Commodities Authority. |
|
Executive Council: |
The Executive Council of
the Emirate of Dubai. |
|
Competent Authority: |
An authority responsible
for licensing economic activities in the Emirate. |
|
Founder: |
The Government, in its
capacity as the sole owner of the Company prior to its public offering. |
|
Financial Market: |
Any of the financial
markets in which the Company shares are listed. |
|
Companies Law: |
Federal Law by Decree
No. (32) of 2021 Concerning Commercial Companies. |
|
Law: |
Law No. (27) of 2021 Concerning
the Dubai Electricity and Water Authority. |
|
Government Shareholder: |
The Department of Finance,
in its capacity as the holder of the Government share in the Company. |
|
Shareholder: |
A natural or legal
person who holds shares in the Company. |
|
Company: |
The Dubai Electricity
and Water Authority PJSC. |
|
Affiliate: |
Any company to which the
definition of “Affiliate” under the relevant Governance Rules applies. |
|
Subsidiary: |
Any company or
corporation whose majority shares are owned directly or indirectly by the
Company. |
|
General Assembly: |
A meeting of
Shareholders, or the Shareholders attending that meeting. The venue, time,
and method of convocation of the General Assembly shall be determined in
accordance with these Articles, and the Companies Law and the resolutions
issued in pursuance thereof. |
|
Special Resolution: |
A resolution passed by
majority vote of the Shareholders holding at least three quarters (3/4) of
the shares represented in the General Assembly. |
|
Board of Directors: |
The board of directors
of the Company. |
|
Chairperson: |
The chairperson of the
Board of Directors. |
|
Director: |
A member of the Board of
Directors. |
|
CEO: |
The chief executive
officer of the Company. |
|
Management: |
The executive management
of the Company, comprising the CEO; his/ her assistants; and the
administrative, finance, and technical employees of the Company. |
|
Secretary: |
The secretary of the
Board of Directors or any of its committees. |
|
Auditor: |
An auditor of the
Company appointed by the General Assembly. |
|
Governance Rules: |
A set of regulations and
procedures issued by the SCA, which ensures achievement of corporate
discipline in all the Company affairs, including the responsibilities and
duties of the CEO, the Directors, and the Management, as well as the rights
of Shareholders. |
|
Cumulative Voting: |
A voting process
pursuant to which each Shareholder has a number of votes equal to the number
of shares held by such Shareholder, and whereby, when voting in favour of
Director appointments, such votes may be cast in favour of a single nominated
Director or distributed in favour of more than one (1) nominated Director,
provided that the number of votes cast by a Shareholder does not exceed the
number of the shares held by such a Shareholder. |
|
Listing Rules: |
The rules and
requirements of listing set forth in the Companies Law and the resolutions
issued in pursuance thereof, the resolutions issued by the SCA, and the
regulations of the Financial Market. |
|
Related Party: |
Any person, entity, or
body designated as Related Party by the SCA pursuant to the relevant
resolutions it issues. |
The name of the Company shall be the
Dubai Electricity and Water
Authority PJSC.
a.
The
head office of the Company shall be in the Emirate of Dubai. The Board of
Directors may establish branches and offices of the Company within and outside
of the Emirate.
b.
The
Board of Directors may enter into commercial agency agreements with any entity
on behalf of the Company; and establish Subsidiaries or Affiliates within or
outside of the Emirate.
The
term of the Company is ninety-nine
(99) Gregorian years, automatically renewable for
the same period unless a Special Resolution is issued by the General Assembly
modifying the term of the Company or dissolving the Company before the end of the term.
a.
The Company is
the competent authority in the Emirate exclusively responsible for achieving
the following objectives:
1.
to set up, manage, operate, maintain, and own the
public water and electricity network, including power generation and water
desalination stations, water reservoirs, and power and water transportation and
distribution networks and systems within the Emirate;
2.
to establish; manage; operate; maintain; and own
electricity and water networks, power stations, water desalination plants,
water reservoirs, and power transmission and water distribution networks and
systems outside of the Emirate.
3.
to develop all water sources, including the
treatment of the water of the reservoirs to become potable; and to store,
transport and distribute water to consumers in the Emirate; and
4.
to set up and manage such projects in connection
with power generation and water supply to satisfy the needs of the public and
the requirements of development in
the Emirate.
b.
For the
purposes of achieving the objectives set forth in paragraph (a) of this
Article, the Company may:
1. purchase
electricity and water from any entity at such prices and conditions as the
Company may deem fit, and in accordance with the rules and procedures approved
by the Company in this regard;
2.
contract with others to construct, set up, manage,
and operate power generation and water desalination plants; and establish, operate, and dissolve
Subsidiaries in accordance with the above-mentioned Law No. (6) of 2011 and other legislation in force in the Emirate;
3. establish companies
wholly or partially owned by it, or contribute directly or indirectly to
companies in connection with the water and electricity sector, whether within
or outside of the Emirate;
4. purchase, sell, and
supply fuel to the entities permitted to carry out power generation and water
supply in accordance with the applicable legislation in the Emirate;
5. acquire, own, rent, and lease out land and
other real property as required to achieve its objectives;
6. invest its funds in
any commercial, financial, service, or industrial fields in such manner as the
Company may deem appropriate, whether directly, indirectly, or through its
Subsidiaries;
7. borrow money with
or without security in accordance with the legislation in force in the Emirate,
and lend money to Subsidiaries;
8. grant rights of
usufruct and any other real rights on the land owned by the Company to any
entity or company contributing to the power generation and water supply in the
Emirate;
9. execute and oversee
projects in accordance with the above-mentioned Executive Council Resolution
No. (46) of 2014 and as may be determined by the Board of Directors; and
10. engage in an any
other industrial or commercial work or activities related to achieving the
objectives of the Company without contradicting the provisions of these
Articles and the legislation in force in the Emirate.
a.
The
issued capital of the Company is five hundred million dirhams (AED
500,000,000.00), divided into 50,000,000,000 (Fifty billion) shares. The
nominal value of each share is 0.01 dirham (One fils).
b.
All
the shares of the Company shall be nominal and equal in rank and rights with
one another in all aspects.
The percentage of
Government shareholding of the Company must not be less than fifty one percent
(51%) of the share capital of the Company at all times.
The shares of the Company shall be
offered for public subscription in accordance with the relevant percentages
prescribed by the Executive Council.
One hundred percent (100%) of the total
nominal value of the shares shall be paid up in full on subscription.
The
Shareholders shall be responsible for the Company’s liabilities and losses only
to the extent of any amount unpaid in respect of the shares held by them. Such
liabilities of the Shareholders may be increased only with their unanimous
consent.
The
ownership of any share in the Company shall be deemed an acceptance by the
Shareholder to be bound by these Articles and the resolutions of the General
Assembly. A Shareholder may not request a refund of the amounts paid to the
Company in consideration of his/ her shareholding in the capital.
The
shares are not divisible, which means that a share may not be divided among
more than one (1) person.
Each
share shall entitle its holder to a proportion equal to that of the other
shares without distinction. A Shareholder is entitled to:
1.
ownership
of the assets of the Company, upon dissolution, equal to the value of the
shares he/she holds;
2.
the
profits of the Company, in proportion to the value of the shares he/she holds;
3.
the
right to attend General Assembly meetings; and
4.
voting
on the resolutions of the General Assembly.
a.
The
Company shall list its shares on any Financial Market licensed in the Emirate.
The Board of Directors may list the Company shares on Financial Markets outside
of the Emirate or the UAE. In issuing, registering, trading in, transferring,
and creating rights in the Company shares, the Company shall comply with the
rules provided for in these Articles, the Companies Law and the resolutions
issued in pursuance thereof, the SCA resolutions, the listing rules, the
regulations adopted by the relevant Financial Markets, and the legislation in
force in the Emirate.
b.
The
Company’s shares may be sold, transferred, pledged, or otherwise legally
disposed of, in accordance with the provisions of these Articles, and all such
dispositions shall be registered in a special register referred to as the
“Share Register” to be maintained by the Company. Upon listing the Company’s
shares on the Financial Market, all dispositions related to these shares,
including any set-off or settlement, shall be registered in accordance with the
regulations applicable in the Financial Market.
c.
In
the event of the death of a Shareholder, his/ her heir(s) or devisee(s) shall
be the only person(s) having rights or interests in the shares of the deceased Shareholder. Such heir(s)
or devisee(s) shall be entitled to such dividends and other privileges as the
deceased Shareholder would have been entitled in relation to such shares. Such
heir(s) or devisee(s), after being registered as a Shareholder in accordance
with these Articles, shall have the same rights in his/ her capacity as a
Shareholder in the Company as the deceased Shareholder had in relation to such
shares. The estate of the deceased Shareholder shall not be exempted from any
obligation to the Company or others regarding any share held by him/her at the
time of death.
d.
Any person who becomes entitled to rights to a share
or shares in the Company as a result of the death, dissolution, or bankruptcy
of any Shareholder, or pursuant to an attachment order issued in favour of that
person by any competent court of law, must within thirty (30) days:
1.
produce written evidence of such right to the
Company; and
2.
decide, in accordance with the Companies Law and
the resolutions issued in pursuance thereof, either to be registered as a
Shareholder or to nominate another person to be registered as a Shareholder of the share(s) devolved
unto him/her by way of inheritance, dissolution, bankruptcy, or judicial
attachment.
When
the Company completes the listing of its shares on the Financial Market, it
shall replace its Share Register and ownership transfer system with an
electronic system for the registration of the shares and transfer thereof,
which is compatible with the system adopted by the Financial Market. The data
recorded in that electronic system shall be final and binding, and may not be
challenged, transferred, or altered except in accordance with the laws,
regulations, and procedures applicable in the Financial Market.
A
Shareholder’s heirs, successors, or creditors may not, for whatsoever reason,
request the attachment of the Company’s assets. They also may not request to
subdivide these assets or sell them, nor to interfere in any way whatsoever in
the management of the Company. Those heirs, successors, and creditors must,
when exercising their rights, rely on the Company’s inventories and financial
statements, and the resolutions of the General Assembly.
a.
Subject to the provisions of the Companies Law and the resolutions issued in pursuance thereof,
the share capital of the Company may, after
obtaining the SCA approval, be increased by issuing new shares of the same
nominal value as the original shares or of the same nominal value plus a
premium, or with granting a discount on the nominal value of the share. Subject
to obtaining the SCA approval, the share capital of the Company may also be
reduced in accordance with the provisions of the Companies Law and the
resolutions issued in pursuance thereof.
b.
An increase
or a reduction of the share capital shall require a Special Resolution of the
General Assembly issued pursuant to a proposal of the Board of Directors after
reviewing the Auditor’s report. In the case of increase of the share capital,
the resolution must state the amount of the increase and the value of the shares
to be issued. In the case of reduction of the share capital, the resolution
must state the amount to be reduced and the method of reduction.
c.
Subject
to the provisions of Articles (225), (226), (227), and (231) of the
Companies Law, the Company may, after obtaining the SCA approval and issuance
of the relevant General Assembly resolution, increase its capital without
applying the pre-emption rights of the existing Shareholders:
1.
for the purpose of entry of a strategic partner;
2.
for the purpose of capitalising the Company’s
debts;
3.
for the purpose of converting bonds or sukuk
issued by the Company into shares; or
4.
for acquiring an existing company and issuing new
shares of the Company to the partners or shareholders of that acquired company.
a.
Subject
to the provisions of the Companies Law and the resolutions issued in pursuance
thereof, the General Assembly may, pursuant to a Special Resolution and upon
the recommendation of the Board of Directors, resolve to issue tradable or
non-tradable bonds, sukuk, or other securities of any nature of equal value per
issue whether they are convertible to shares or otherwise. The resolution
issued by the General Assembly shall determine the value of the bonds,
securities or sukuk, the terms of issuance and their tradability and
convertibility into shares. The General Assembly may also delegate to the Board
of Directors the power to determine the date of issuance of such bonds and
sukuks, pursuant to the rules adopted by the Authority.
b.
Any
bond or sukuk issued by the Company shall remain nominal until fully paid up.
The Company may not issue “bearer” bonds or sukuks. Bonds or sukuks issued in
connection with a single loan shall give equal rights to the holders of such
bonds or sukuks. Any condition to the contrary shall be invalid.
a.
Subject
to the provisions of Article (10) of the Law and the provisions of the
above-mentioned Decree No. (55) of 2021, the Company shall be managed by a
Board of Directors consisting of the Chairperson, the vice chairperson, and
other experienced and specialised members. The number of the Board of Directors
members, including the Chairperson and the vice chairperson, may not be less
than seven (7). The Directors shall be appointed or elected by the General
Assembly via secret Cumulative Voting.
b.
The
Board of Directors shall be appointed or elected in line with the ownership
rights in the Company, as follows:
1.
The Government Shareholder shall be entitled to
appoint a number of Directors commensurate with its shareholding in the Company
Share Capital.
2.
The remaining Directors shall be elected without
participation of the Government Shareholder via secret Cumulative Voting in
accordance with the provisions of the Companies Law and the resolutions issued
in pursuance thereof.
3.
A Director may be an experienced person who is not
a Shareholder.
4.
The Company shall abide by the Governance Rules
with respect to nomination for the Board of Directors membership. A candidate
for membership shall provide the Company with the following information and
documents:
a)
a curriculum vitae
stating his/ her academic qualifications and professional experience, and
details of the position he/she is nominated to;
b)
an undertaking to abide by the Law, the Companies
Law and the resolutions issued in pursuance thereof, and these Articles and to
exercise his/ her duties as a prudent person throughout the term of his/ her
membership in the Board of Directors;
c)
a list of the companies and entities for which
he/she works at the time of nomination or in which he/she is a Director, in
addition to any other competing activity he/she carries out, whether directly
or indirectly;
d)
for representatives of corporate bodies, a letter
from the corporate body listing the names of its candidates for the Board of
Directors membership; and
e)
a list of the commercial companies in which he/she
is a partner or a shareholder, in addition to the number of shares or stocks
he/she owns.
a.
Membership
of the Board of Directors shall be for a term of three (3) years. At the end of
such term, the Board of Directors shall be reconstituted by appointing or
electing new members, or reappointing or re-electing former members.
b.
Where
the position of a Director falls vacant, the Board of Directors may appoint a
new Director to fill that position within thirty (30) days from the date of
vacancy. Such appointment must be presented to the General Assembly in its
first subsequent meeting to approve the appointment decision or appoint another
Director. The new Director shall complete the term of his/ her predecessor.
Where no new Director is appointed within the aforementioned period, the Board
of Directors shall, at the first subsequent General Assembly meeting, solicit
candidates for election to fill the vacancy in the Board of Directors.
c.
If
the vacant positions during the year reach or exceed twenty-five percent (25%)
of the number of Directors, the Board of Directors must call for a General
Assembly to convene within thirty (30) days from the date of reaching this
percentage in order to elect new Directors. In all cases, a new Director shall
complete the term of his/ her predecessor.
a.
Upon expiry of the tenure of the Board of Directors formed pursuant to
the above-mentioned Decree No. (55) of 2021, the new Board of Directors shall
elect by secret ballot, from amongst its members, a Chairperson and a vice
chairperson, who shall act in the capacity of the Chairperson in case of his/
her absence or vacancy of his/ her position.
b.
The
Chairperson is responsible for supervising the Board of Directors and the
performance of its functions under the Law, these Articles, and the Companies
Law and the resolutions issued in pursuance thereof.
c.
The
Board of Directors shall appoint from amongst the Company employees a Secretary
to the Board of Directors in accordance with the relevant rules adopted by the
SCA. The Secretary shall be responsible for preparing the agendas of the Board
of Directors; sending invitations to Directors to attend its meetings;
recording, following up the implementation of, maintaining, and archiving its
minutes of meetings, resolutions, and recommendations; and performing any other
duties assigned to him by the Chairperson or the Board of Directors.
d.
The
Secretary must satisfy the conditions and requirements stipulated in the
Governance Rules. The Secretary shall report directly to the Board of
Directors, and may only be dismissed by resolution of the Board of Directors.
e.
The
Board of Directors may, in line with the Law and the Governance Rules, form one
or more committees from amongst its members, and delegate to such committees
any of the duties and powers assigned to the Board of Directors.
a.
The Board of Directors shall
undertake the general management of the Company and its performance of all the
functions and activities required to achieve its objectives. The Board of
Directors shall also act on behalf of the Company within the scope of the
functions assigned to it under the Law, the Companies Law and the resolutions
issued in pursuance thereof, these Articles, and the General Assembly
resolutions. In particular,
the Board of Directors shall have the duties and powers to:
1.
approve, and follow up the implementation of, the
strategic plans and policies of the Company;
2.
conclude loan agreements for periods in excess of
three (3) years; and sell or mortgage the Company’s real property, assets, or
movable and immovable property. In this regard, the Board of Directors shall
draft the rules and regulations related to concluding loan agreements and
selling or mortgaging the Company’s real property, assets, or other property;
and present the same to the General Assembly for approval in its first meeting;
3.
agree to releasing the Company’s debtors from
liabilities; engage in conciliation and arbitration; agree to the application
of foreign laws to any of its agreements; and establish, invest in, sell,
dissolve, and liquidate fully or partially owned companies and Subsidiaries;
4.
approve the terms of reference of the Board of
Directors and all other relevant matters, including the allocation of functions
and delegation of responsibilities to Directors;
5.
approve the financial, administrative, and
technical regulations of the Company, including the delegation of authority
matrix; the regulations governing its procurements and asset management; and
the regulations governing its human resources;
6.
approve the organisational structure of the
Company;
7.
divide, transfer, convert, merge, consolidate,
sell, mortgage, assign, or dispose of, in any legal manner, any of the
Company’s funds, or assets or the funds or assets of any of the Subsidiaries;
8.
allow the Company and the Subsidiaries to engage
in any investment, borrowing, or lending; or in issuing guarantees, bonds,
sukuk, or any other debt instruments, in accordance with the legislation in
force in the Emirate;
9.
acquire and merge companies and establishments;
and
10. exercise any other
duties or powers aligned with the objectives of the Company as required to
serve its interests without contradicting the provisions of the legislation in
force in the Emirate.
b.
The
Board of Directors may delegate any of its powers under sub-paragraphs (a)(2),
(a)(3), and (a)(4) of this Article to a committee formed by the Board of
Directors, provided that this committee comprises at least three (3) members.
The Board of Directors may also delegate the powers assigned to it under sub-paragraph (a)(5) of this Article to the CEO, provided that
such delegation is specific, in writing, and in accordance with the delegation
of authority matrix approved by the Board of Directors.
a.
Subject
to the provisions of paragraphs (b) and (c) of Article (10) of the Law, and the
provisions of the above-mentioned Decree No. (56) of 2021, the CEO shall have
the powers and undertake the duties set out below:
1.
represent the Company before all entities within
and outside of the Emirate, including judicial authorities and government and
non-government entities;
2.
implement all resolutions issued by the General
Assembly and the Board of Directors;
3.
manage the day-to-day work of the Management and
operations of the Company, and ensure the performance of the duties assigned to
it under the Law, the Companies Law and the resolutions issued in pursuance
thereof, these Articles, the legislation in force in the Emirate, and the regulations
applicable by the Company;
4.
conclude contracts, agreements, and memoranda of
understanding, and sign documents of whatever nature and type, within the
powers vested in him/ her under these Articles and the delegation of authority
matrix;
5.
issue policies, decisions, and internal
regulations in connection with the affairs of the Company and the Subsidiaries,
except for the regulations which the Board of Directors is exclusively
authorised to approve pursuant to sub-paragraph (a)(5) of Article (22) of these
Articles;
6.
undertake all financial and banking functions, and
make the decisions related thereto, in accordance with the powers assigned to
him/ her under the regulations adopted by the Company;
7.
perform all functions assigned to him/ her under
the legislation applicable by the Company, its internal regulations, and other
legislation in force in the Emirate;
8.
supervise the executive body of the Company and
all matters related to its human resources, including approval of the
appointment of employees, determination of their salaries and remuneration,
their transfer and dismissal, and all other relevant matters, in accordance
with the powers stipulated in the human resources regulations adopted by the
Company;
9.
recommend to the Board of Directors the nomination
of the Company representatives in the boards of directors of the Subsidiaries.
The appointment of these representatives in the boards of directors of
Subsidiaries shall be approved pursuant to a resolution of the Board of
Directors;
10. form permanent and
temporary committees and work teams, and determine their functions and the
remunerations of their members, in line with the regulations adopted by the
Company, the Companies Law and the resolutions issued in pursuance thereof; and
the Governance Rules;
11. appoint persons to
represent the Company in respect of any matter related to serving its interests
and protecting its rights;
12.
conclude conciliation on behalf of the Company,
agree to the application of foreign laws to any of the contracts and agreements concluded by
the Company and the Subsidiaries, file lawsuits and appoint attorneys, and
conclude judicial and legal settlements in accordance with the Board of
Directors resolutions and with a view to serving the Company's interests; and
13.
carry out any other duties or powers delegated or assigned to him/ her by the
General Assembly, the Chairperson, or the Board of Directors.
b.
The
CEO shall exercise the duties and powers assigned to him under paragraph (a) of
this Article in accordance with the relevant delegation of authority matrix
approved by the Board of Directors.
c.
In
accordance with work requirements, the CEO may delegate any of his/ her powers
under paragraph (a) of this Article to any of the Company employees with a view
to serving the interests of the Company and the Subsidiaries, provided that
such delegation is specific, in writing, and in accordance with the delegation
of authority matrix approved by the Board of Directors.
The Board of Directors shall be convened, at least four
(4) times a year and where necessary, at the invitation of its Chairperson, or
vice chairperson in case of absence of the Chairperson at the time and place
he/ she determines. The meetings of the Board of Directors may be
held through audio or videoconferencing facilities. The invitation shall be sent,
together with the approved agenda, at least one (1) week before the date
scheduled for the meeting. Each Director may request adding any items to the agenda to be
discussed at the meeting subject to approval of the
request by the chair of the meeting.
a.
A
meeting of the Board of Directors or any of its committees shall be valid if attended by
the majority of its members. Attendance shall be in person, by being physically
present or through videoconferencing or any other audio-visual media as may be
approved by the Board of Directors or its committee. A Director may give a
written proxy to another Director to attend a meeting of the Board of Directors
or its committee and vote on his/ her behalf. In such a case, such Director
shall have one (1) vote out of the votes of attending members. A Director may
not hold more than one proxy at any meeting, and no Director shall vote by way
of correspondence.
b.
The
resolutions of the Board of Directors or of its committee shall be passed by
majority vote of its members
or their representatives. In case of a tie, the chair of the meeting
shall have a casting vote.
a.
All
topics and issues considered and discussed, and decisions made, shall be
recorded in the minutes of meetings of the Board of Directors or its committees.
Any reservations made by any Director or any dissenting opinions shall also be
recorded in these minutes.
b.
Attending
Directors and the Secretary shall sign the minutes of meetings of the Board of
Directors or its committee whether with their own hands or electronically. Once
approved, copies of these minutes shall be distributed to the Directors for
their record.
c.
The
minutes of meetings of the Board of Directors and its committees shall be
maintained by the Secretary. Where a Director refuses to sign any minutes of
meeting, this shall be recorded in the minutes together with any reasons
provided for the refusal.
Without prejudice to the quorum required for
convening the Board of Directors, the Board of Directors may approve certain
resolutions or recommendations by circulation, subject to the following:
1.
The
majority of the Directors acknowledge the existence of an emergency requiring
issuing resolutions or recommendations by circulation.
2.
The
resolutions and recommendations required for circulation amongst Directors must
be in writing and accompanied with all related documents.
The Chairperson, the CEO, the Secretary, and the
Company’s legal advisor are hereby authorised, jointly or severally, to provide
certified copies of the minutes of meetings of the Board of Directors or its
committee, to sign these copies, to confirm that they are certified true copies
of the original minutes, and to date these certified copies. Any party dealing
with the Company may rely on any of the certified copies as a true copy of the
original document.
The Chairperson and Directors must avoid any
conflict of interest that may arise as a result of their membership in the Board of Directors or any of its committees,
avoid any act that may raise any suspicions of conflict of interest, and
disclose any conflicts of interest or any suspicion thereof. In particular,
they must refrain from the following:
1.
participating
in any discussion or vote on, or impacting in any way whatsoever, any decision,
recommendation, or procedure in which they or their spouses or relatives up to
the fourth degree have any direct or indirect interest;
2.
exploiting
their membership in the Board of Directors or its committee, disclosing any
information they obtain as a result of that membership in order to achieve
specific objectives or receive a special service or treatment;
3.
participating
in any process, procedure, or decision that may affect their objectivity,
impartiality, or independence in performing their duties; and
4.
being
involved in any of the conflicts of interest stipulated in the Companies Law
and the resolutions issued in pursuance thereof, and in other legislation in
force in the Emirate.
Any resolutions issued in violation of this
Article shall be deemed null and void.
a.
Conflicts
of interest must be disclosed by the concerned Director in the minutes of
meeting of the Board of Directors or its committee. The Secretary must record
that disclosure in a register maintained for this purpose, update this register
on a regular basis, and present it to the Chairperson and Directors for
perusal.
b.
The
Board of Directors shall have the right to consider any conflict of interest a
Director may be involved in, and make the relevant decision by majority vote of
attending Directors. The Director involved in the conflict of interest may not
vote on the relevant decision.
c.
Where
a Director fails or refuses to disclose to the Board of Directors a conflict of
interest related to a dealing or transaction to which the Company is a party,
the Company or any of its Shareholders may request the Board of Directors, the
Competent Authority, or the competent court to rescind such dealing or
transaction and require the violating Director to return to the Company any profit
or benefit derived from the relevant dealing or transaction.
Membership in the Board of Directors will
terminate in any of the following cases:
1.
death,
legal incapacity, or inability to carry on duties;
2.
conviction
of any felony or other crime affecting honour or trustworthiness;
3.
resignation
pursuant to a written notice served on the Chairperson;
4.
dismissal
by a resolution of the General Assembly; or
5.
absence,
during the tenure of the Board of Directors, for three (3) successive or five
(5) non-successive meetings of the Board of Directors, without an excuse
acceptable to the Chairperson.
Subject to the provisions of Article (33) of these
Articles, a Director may not be personally liable for any obligations of the
Company as a result of performing his/ her duties as Director, to the extent
that he/ she does not exceed his/ her authority.
a.
The
Board of Directors and the Management shall be held liable towards the Company,
Shareholders, and third parties for all acts of fraud or abuse of powers, and
for any breach of the legislation in force or these Articles. Any provision to
the contrary shall be invalid.
b.
The
liability of Directors referred to in paragraph (a) of this Article will be
joint liability if it arises from a unanimous resolution of the Board of
Directors. However, where the relevant resolution is adopted by majority vote,
the Directors who have objected to the resolution or made reservations thereon
shall not be held liable for the same, provided that they have recorded their
objection or reservation in writing in the minutes of the meeting in which the
resolution was adopted. A Director who was absent from the meeting in which the
resolution was adopted shall not be relieved from liability unless it is proven
that he had no knowledge of the resolution or that he knew about the resolution
but had not been able to object to it. The Management shall bear the liability
specified in paragraph (a) of this Article if the breach arises from a decision
issued by it.
c.
The
Company shall, to the extent of the value of its assets, indemnify the
Directors and the members of the Management of the Company against any
liability, with the exception of criminal liability, incurred by them as a
result of or in connection with the performance of their duties in the Company,
provided that these Directors or members have been acting in good faith and in
a manner they reasonably believed to be in the best interests of the Company.
Nonetheless, no indemnification shall be made in respect of any claim or matter
as to which that Director or member has been finally adjudged by a competent
court to be liable towards the Company. In all events, the Company shall
maintain the necessary insurance coverage in respect of the Board of Directors
and Management liability.
a.
The
Company may not provide any loans to any Director or execute guarantees or
provide any securities in connection with any loans granted to him/her. A loan
shall be deemed as granted to a Director if granted to his/ her spouse,
children, or relatives up to the second degree.
b.
No
loan may be granted to a company in which a Director or his/ her spouse,
children, or relatives up to the second degree hold more than twenty percent
(20%) of the share capital.
a.
The
Related Parties shall not use any information to which they have access by
reason of their membership in the Board of Directors or employment with the
Company to achieve any interest whatsoever for themselves or for third parties
through dealing in the securities of the Company or any other transactions. The
Related Parties may not have a direct or indirect interest with any party
entering into transactions intended to influence the price of the securities of
the Company or those issued by it.
b.
Transactions
with Related Parties shall be governed by an internal policy approved by the
Board of Directors. The Auditor shall state in his/ her annual report any
conflicts of interest or financial dealings that have taken place between the
Company and any Related Parties, and the action taken in this respect.
c.
Articles
(29), (30), (37), and (48) of these Articles shall not apply to the
transactions or dealings entered into or concluded by the Company with the
Founder, or by the Company with any other company that is directly or
indirectly owned by or under the Control of the Founder, federal government, or
local government, or any entity owned directly or indirectly by the Government,
the federal government, or any Subsidiary, sister company, or Affiliate of the
Company; and shall not apply to any transaction that may be challenged on the
grounds of a conflict of interest arising out of the appointment of a Director
by the Founder. Any such transactions shall be exempt from compliance with the
relevant provisions of the Companies Law and the resolutions
issued in pursuance thereof,
and with any other rules concerning the transactions of Related Parties
regulated by the relevant resolutions issued by the SCA.
a.
The
remuneration of Directors shall be calculated as a percentage of the net
profits of the Company, and may not exceed one percent (1%) of the net profits
for the relevant financial year after deducting the depreciation allowance and
reserves. The duties of the Chairperson and the CEO must be taken into
consideration when determining their remuneration. The Company may reimburse
any Director for the expenses he/she incurs.
b.
Subject
to obtaining the approval of the General Assembly, the Board of Directors may
pay a Director his/ her remuneration as a lump sum not exceeding two hundred
thousand dirhams (AED 200,000.00) at the end of the financial year in the
following cases:
1.
if
the
Company is not making a profit; and
2.
if the Company makes profits but the Director’s
remuneration calculated as a percentage of these profits is less than two hundred thousand dirhams (AED
200,000.00).
Without prejudice to the provisions of the
above-mentioned Decree No. (55) of 2021, and the provisions of Article (19) of
these Articles, the General Assembly may dismiss all or any of the elected
Directors, and solicit candidates for the election of new Directors in their
places in accordance with the Governance Rules. A dismissed Director may not
stand for election or be re-elected as a Director for at least three (3) years
from the date of dismissal.
A General Assembly shall be duly convened in the
Emirate where the Shareholders owning more than fifty percent (50%) of the
share capital of the Company are in attendance. If the quorum is not present in
the first General Assembly meeting, an invitation for a second meeting shall be
sent, and that meeting shall be convened no earlier than five (5) days and no
later than fifteen (15) days from the scheduled date of the first meeting. The
second General Assembly meeting shall be deemed duly convened regardless of the
number of Shareholders in attendance.
a.
Each Shareholder shall have the right to attend a
General Assembly, and each Shareholder shall have a number of votes equal to
the number of his/ her shares. A Shareholder may authorise any person to attend
the General Assembly on his/ her behalf, provided that such person is not a
Director, an employee of the Company, or a brokerage company or any of its employees. Such authorisation shall be valid only
if it is documented in a written proxy in accordance with the relevant
conditions stipulated by the Board of Directors. The number of shares
represented by a proxy for multiple Shareholders may not exceed five percent
(5%) of the Company’s share capital. Shareholders lacking legal capacity and
legally incapacitated Shareholders shall be represented by their legal
representatives.
b.
A
legal person may, pursuant to a resolution of its board of directors or its
assignee, delegate a representative, a person in charge of its management, or
any of its employees to represent it in the General Assembly. The delegated
person shall have the powers determined in the delegating resolution.
a.
An
invitation
to attend a General Assembly shall be served on Shareholders, after obtaining
the approval from the SCA, through announcement in two (2) daily local
newspapers issued in Arabic and English,
or by email, short message service (SMS), or registered mail, at least
twenty-one (21) days prior to the date scheduled for the meeting. The
invitation must contain the agenda of the General Assembly meeting. A copy of
the invitation shall be sent to the SCA and the Competent Authority.
b.
General
Assembly meetings and Shareholders’ participation in its deliberations and
voting on its resolutions may be conducted using modern electronic means for
distance participation, in accordance with the relevant rules and procedures
adopted by the SCA.
A General Assembly shall be convened by:
1.
the
Board of Directors, at least once a year within the four (4) months following
the end of each financial year;
2.
the
Board of Directors, where necessary, upon a request of the Auditor, or if one
or more Shareholders holding not less than ten percent (10%) of the share
capital request a meeting. In case of request for meeting, the Board of
Directors shall convene a General Assembly meeting within five (5) days from
the date of submitting the request. The meeting shall be held within thirty
(30) days from the date of its invitation;
3.
the
Auditor directly, if the Board of Directors fails to send an invitation to
convene the General Assembly while this is required under the Companies Law and
the resolutions issued in pursuance thereof, or within five (5) days from the
date of submission of a request for meeting by the Auditor to the Board of
Directors; or
4.
the
SCA, within five
(5) days from the date of its request to the Board of Directors to convene the
General Assembly, in the following cases:
a.
the
lapse
of thirty (30) days after the date prescribed for the General Assembly meeting,
or lapse of four (4) months after the end of the financial year, without the
Board of Directors sending an invitation to the meeting;
b.
if the number of Directors no longer constitutes a
quorum;
c.
where it is established to the Company’s
satisfaction, at any time, that violations of the Companies Law or the resolutions
issued in pursuance thereof, or of these Articles, have been committed, or
substantial errors in managing the Company have been made; or
d.
if the Board of Directors fails to convene a meeting of the
General Assembly requested by one or more Shareholders representing ten percent
(10%) or more of the share capital of the Company.
The following items shall be included on the
agenda of the annual General Assembly for action:
1.
the
report of the Board of Directors on the activities of the Company and its
financial position throughout the year; and the report of the Auditor, for
approval;
2.
the
balance sheet and profit and loss account, for discussion and approval;
3.
election
of Directors, where necessary;
4.
appointment
of Auditors and determining their remuneration;
5.
the
proposals of the Board of Directors concerning the distribution of profits,
whether as cash dividends or bonus shares, for consideration;
6.
the
proposals of the Board of Directors concerning the remuneration of Directors
and determination of the same in accordance with the provisions of these
Articles, for consideration;
7.
any
case of dismissal, discharge of liability, impeachment, or suing of Directors
where necessary; and
8.
any
case of dismissal, discharge of liability, impeachment, or suing of Auditors
where necessary.
a.
The
Shareholders wishing to attend a General Assembly meeting must, within
sufficient time prior to the meeting, register their names in the electronic
register maintained by the Management for this purpose. This register must
include the name of the Shareholder or his/ her proxy; the number of shares
owned by the Shareholder, or the number of the shares represented by the proxy
and the names of their owners. The Shareholder or the proxy shall be given a
pass to attend the meeting, which shall state the number of votes held or
represented by him/ her. An extract from the register, indicating the number of
shares represented at the meeting and the percentage of attendance, shall be
printed and attached to the minutes of the General Assembly after being signed
by the chair of the meeting, the General Assembly Secretary, and the Auditor.
b.
Registration
for attending General Assembly meetings shall close when the chair of the
meeting announces whether or not the quorum of such meeting is reached. No
registration of any Shareholder or proxy may be accepted thereafter, and the
votes of such late Shareholders or proxies shall not count and their views on
the matters raised in that meeting shall not be taken into account. If any of
the attending Shareholders, or their representatives, withdraws from a quorate
General Assembly meeting, such withdrawal shall not affect the validity of the
meeting. In that case, resolutions will be passed by the majority prescribed in
the Companies Law based on the remaining shares represented at the meeting.
The register of Shareholders shall be closed in
accordance with the regulations on trading, set-off,
settlement, transfer of ownership, and custody of securities and the
relevant rules prevailing in the Financial Market.
The provisions of the
Companies Law and the resolutions issued in pursuance thereof shall apply to
the quorum required for the validity of General Assembly meetings and to the
majority required to adopt resolutions.
a.
A General Assembly meeting shall be chaired by the Chairperson, or by the vice
chairperson in case of absence of the Chairperson. If both the Chairperson and
vice chairperson are absent, the General Assembly meeting shall be chaired by
the CEO or by any Director appointed by the Board of Directors for this
purpose.
b.
If
the persons referred to in paragraph (a) of this Article are not present in the
meeting, the General Assembly shall appoint a Shareholder to chair the meeting
and shall appoint a secretary for the meeting.
c.
The
General Assembly shall appoint a teller to count votes in any of its meetings.
d.
The
minutes of meetings of the General Assembly and the details of the attendees
shall be recorded in special books maintained for this purpose. These minutes
must be signed by the chair of the relevant meeting, the General
Assembly Secretary, the tellers, and the Auditor. The signatories of the
minutes of meeting shall be held liable for the accuracy of the information
contained therein.
Voting at a General
Assembly shall be in such manner as specified by the chair of the General
Assembly meeting, unless the General Assembly prescribes a different manner of
voting. Voting must be by secret ballot if it relates to the dismissal or
impeachment of Directors.
a.
Directors may not participate in voting on any General
Assembly decisions relating to discharging them from liability for management or conferring a private
benefit upon them or which relates to a conflict of interest or dispute between
them and the Company.
b.
A
person having the right to attend General Assembly meetings may not
participate in voting in his/ her personal capacity or by proxy on matters
related to a personal benefit or an existing dispute between him and the
Company.
Subject to the Companies
Law and the resolutions issued in pursuance thereof, the General Assembly
may, pursuant to a Special Resolution:
1.
increase
or reduce the share capital of the Company in any way;
2.
sell
or dispose of, in any legal manner, all or any part of the business, projects,
or assets of the Company;
3.
extend
or terminate the term of the Company;
4.
issue
sukuk, bonds, or any other financial instruments;
5.
subject
to obtaining the approval of the SCA, decide to allocate a percentage of its
annual profits or accumulated profits for social responsibility purposes. In
that case, the Company must disclose its social responsibility contribution on
its website upon the end of the financial year, and the Auditor must include in
his/ her report and in the Company’s annual financial statements the names of
the beneficiary(ies) of the social responsibility contribution of the Company;
and
6.
amend these Articles,
subject to the following restrictions:
a.
amendments may not increase the Shareholders’
obligations; and
b.
amendments may not lead to the transfer of head
office of the Company to outside of the Emirate.
Subject to the legislation
applicable to the SCA and the Financial Markets, the owners of registered
shares as of the working day preceding a General Assembly meeting shall be
deemed the holders of the right to vote in that meeting.
a.
Subject to
the provisions of the Companies Law and the resolutions issued in pursuance
thereof, the Law and the resolutions issued in pursuance thereof, and these
Articles, the General Assembly shall have the authority to consider any matters
related to the Company and listed in the agenda.
b.
Notwithstanding
the provisions of paragraph (a) of this Article, the General Assembly may
deliberate over any crucial matters revealed during the meeting, or any matters
requested by the SCA, or by a Shareholder(s) representing at least
five percent (5%) of the share capital of the Company, to be included in the
agenda of the General Assembly before that agenda is discussed. The chair of
the meeting shall grant the request, in accordance with terms determined by the
SCA.
a.
The Company
shall have one or more Auditor(s) appointed by the General Assembly for a
renewable term of one (1) year upon nomination by the Board of Directors. The
fees and remuneration of the Auditor shall be determined by the General
Assembly.
b.
The
Auditor shall audit the accounts of the Company for the relevant financial
year, provided that he/ she is registered with the SCA and licensed to practice
the audit profession in the UAE in accordance with the legislation in force.
c.
The
Auditor shall assume his/ her duties upon the conclusion of the General
Assembly meeting during which he/ she is appointed and until the subsequent
annual General Assembly meeting is concluded.
d.
The
period of appointment of an Auditor shall not exceed the term specified in
the Companies Law and the resolutions issued in pursuance thereof.
a.
The Auditor shall be independent from the Company and
the Board of Directors and may not be a business partner, agent, or relative up to the fourth
degree of the Founder or any of the Directors. The Auditor may not be a
Shareholder or a member of the Board of Directors or occupy any technical,
administrative, operational, or executive position at the Company.
b.
The
Company must take practical steps to ensure the independence of the Auditor and that the Auditor has no conflict of
interest.
a.
The Auditor shall have the duties and powers provided
for in the Companies Law and the resolutions issued in pursuance thereof and in
these Articles. In particular, the Auditor shall, at all times, have the right
to access all the books, records, and documents of the Company and to request
clarifications as he deems necessary for the performance of his/ her duties.
The Auditor shall have the right to verify the assets and liabilities of the
Company. If the Auditor is unable to exercise these powers, he/ she must document this in a written report
submitted to the Board of Directors. If the Board of Directors fails to enable
the Auditor to perform his/ her duties, the Auditor must send a copy of the
report to the SCA and the Competent Authority and present the same to the
General Assembly.
b.
The Auditor shall audit the accounts of the Company,
examine the balance sheet and the profit and loss account, review the Company’s
transactions and dealings with Related Parties, and ensure the implementation of the provisions of the
Companies Law and the resolutions issued in pursuance thereof as
well as these Articles. The Auditor must submit a report on the results of such
examination and audit to the General Assembly and forward a copy thereof to the
SCA and the Competent Authority. In preparing his/ her report, the Auditor
shall verify the following:
1. the accuracy of the
accounting records kept by the Company; and
2. the extent of
conformity of the Company accounts with the accounting records.
c.
The Subsidiaries and their auditors shall
provide any information or clarifications requested by the Auditor for the
purposes of audit.
a.
The
Auditor must submit to the General Assembly a report containing all the
information prescribed in Article (252) of the Companies Law. The Auditor must
attend the General Assembly meeting to present his/ her report to the
Shareholders, clarifying any difficulties or interference by the Board of
Directors encountered during the performance of his/ her duties.
b.
The
report of the Auditor shall be independent and unbiased and shall include the
opinion of the Auditor concerning all matters related to his/ her duties,
particularly the Company’s balance sheet and accounts, its financial position,
and any relevant violations.
c.
The
Auditor shall note in his/ her report and in the balance sheet any charitable
and community contributions made by the Company during the relevant financial
year. The report and the balance sheet shall name the beneficiaries of such
contributions.
d.
In
the capacity of an agent of the Shareholders, the Auditor shall be liable for
the accuracy of the information stated in his/ her report. Each Shareholder may
discuss the report of the Auditor and request clarifications on the matters
included therein during a General Assembly meeting.
a.
The Board of Directors shall maintain duly organised
accounting books which reflect the accurate and fair representation of the Company’s business and dealings in accordance with
internationally recognised accounting standards. No Shareholder shall have the
right to inspect those books without the relevant authorisation from the Board
of Directors.
b.
The
financial year of the Company shall start on the first day of January and shall end
on the thirty first day of December of every year.
a.
The balance
sheet for a financial year must be audited at least one (1) month before the
annual General Assembly meeting. The Board of Directors must prepare a report
on the Company's activities and financial position at the end of the financial
year, and that report must state its recommendations on the distribution of net
profits. Copies of the annual financial statements, the profit and loss
account, the Auditor’s report, the Board of Directors’ report, and the
governance report must be sent to the SCA along with a draft of the annual
General Assembly meeting invitation to the Shareholders of the Company for
approval of the publication of that invitation in the daily newspapers
twenty-one (21) days before the date scheduled for the General Assembly
meeting.
b.
The
annual financial statements of the Company shall be published pursuant to the
relevant rules prescribed by the SCA, and a copy of these statements shall be
lodged with the SCA and the Competent Authority.
The Board of Directors may
deduct a percentage of the annual gross profits as depreciation allowance or
impairment allowance in respect of the Company’s assets. These amounts shall
only be utilised for their intended purposes in accordance with the relevant resolutions
of the Board of Directors, and shall not be distributed to the Shareholders.
The annual net profits of
the Company shall be distributed after deducting all general expenses and other
costs as follows:
1.
ten
percent (10%) of the net profits shall be deducted and set aside as a legal
reserve. This deduction shall cease when the total amount of the reserve is
equal to at least fifty percent (50%) of the share capital of the Company. If
the reserve falls below this threshold, the deduction shall resume;
2.
a
percentage not exceeding one percent (1%) of the net profits for the financial
year then ended shall be allocated as remuneration for the Directors, after
deducting depreciation allowances and reserves. Any penalties imposed by the
SCA or the Competent Authority on the Company as a result of violation by the
Board of Directors of the Law, the Companies Law and the resolutions issued in
pursuance thereof, these Articles, or any legislation in force in the Emirate,
during the financial year then ended shall be deducted from the remuneration of
the Board of Directors. The General Assembly may resolve not to deduct all or
any of these penalties if it finds that these penalties have not arisen as a
result of any negligence or error on the part of the Board of Directors; and
3.
the
balance of the net profits shall be distributed to the Shareholders; carried
forward to the subsequent financial year upon the recommendation of the Board
of Directors; or set aside as an extraordinary reserve, as may be decided by
the General Assembly in this regard.
The legal reserve shall be
utilised pursuant to a resolution of the Board of Directors in the best
interests of the Company. The legal reserve may not be distributed to
Shareholders. However, any amount of the legal reserve in excess of fifty
percent (50%) of the paid-up capital may be utilised to distribute dividends
not exceeding ten percent (10%) of the paid-up capital to the Shareholders in
any years where the distribution of that percentage is not feasible.
a.
Dividends shall be paid to the Shareholders in
accordance with the regulations on trading, set-off, settlement, transfer of ownership, and custody of securities,
and other applicable rules, of the Financial Market in which the Company’s
shares are listed.
b.
The
Company may distribute quarterly or semi-annual dividends to the Shareholders
out of its operating profits or accumulated profits. The Board of Directors shall be
authorised to adopt and implement the resolutions related to the distribution
of dividends in accordance with the dividend distribution policy approved by
the General Assembly.
Civil liability claims
against the Directors may not be barred by reason of any resolution issued by
the General Assembly. If the act giving rise to the liability is presented to
the General Assembly in a Board of Directors’ report or Auditor’s report and is
ratified by the General Assembly, any civil claims in respect of that act shall
be barred upon the expiry of one (1) year from the date of the General Assembly
meeting. However, where the act attributed to the Directors constitutes a criminal
offence, the civil liability claim shall be barred only if the criminal
proceedings are barred.
The Company shall be
dissolved pursuant to a resolution of the Executive Council of the Emirate of
Dubai in any of the following cases:
1.
expiry of the Company’s term as prescribed in these Articles;
2.
fulfilment
of the objectives for which the Company is established;
3.
termination
of the term of the Company pursuant to a Special Resolution issued by the
General Assembly;
4.
merger
of the Company into another company;
5.
issuance
of a court judgement dissolving the Company; or
6.
destruction
of all or most of the Company’s assets, making it unfeasible to invest the
remainder thereof.
If the Company’s
accumulated losses reach fifty percent (50%) of its issued share capital, the
Board of Directors must, within thirty (30) days of the date of disclosure of
the Company’s periodic or annual financial statements to the SCA, invite the
General Assembly to convene to take the necessary action to dissolve the
Company before the expiry of its term or to ensure that it continues its
business activities.
At the end of the term of the Company or in the
event of its dissolution before the expiry of that term, the General Assembly
shall, upon the request of the Board of Directors, determine the method of
liquidation of the Company, and appoint one or more liquidator(s) and determine
their duties. As of the date of appointment of the liquidator(s), the Board of
Directors shall cease to perform its duties. The General Assembly shall
continue to exercise its duties and powers throughout and until the end of the
liquidation process.
The provisions of the Law
and the Companies Law and the resolutions issued in pursuance thereof,
excluding the provisions of Articles (118), (119), (121), (149), (152), (199),
(217), and (221) of the Companies Law, shall apply to any matter not
specifically provided for in these Articles.
The Company shall be
governed by all the resolutions regulating corporate governance adopted by the
SCA. These resolutions shall form an integral and complementary part of these
Articles. Notwithstanding the foregoing, the Company shall not be governed by
the provisions of the above-mentioned SCA Board of Directors Resolution No. (11/C.B.) of 2016, and SCA Board
of Directors Resolution No. (40) of 2015, which are approved by the SCA Board
of Directors on 26 January 2022 as being non-applicable to the Company.
These Articles shall be lodged and published in
accordance with the Companies Law.
©2020 The Supreme
Legislation Committee in the Emirate of Dubai
[1]Every effort has been made to
produce an accurate and complete English version of this legislation. However,
for the purpose of its interpretation and application, reference must be made
to the original Arabic text. In case of conflict, the Arabic text will prevail.