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ABU DHABI SHIP BUILDING
Corporate Governance Code
This Corporate Governance Code sets out the top level guidelines for establishing the
ethical standards of business conduct and internal controls for risk management that
the Company must adhere to in all aspects of carrying out its business.
The Company shall comply with Ministerial Decision No. 84 and Decision No. 518 of
2009 issued by the UAE Ministry of Economy, as amended or replaced, and the
Corporate Governance requirements stated in the Company’s Articles of Association.
It is the responsibility of the Chief Executive Officer and Company Senior
Management to develop a more detailed set of policies and procedures as necessary
to implement the above mentioned standards and controls in such a way as to
ensure that the spirit of the principles they reflect are manifested in the carrying out
of the Company’s business.
1. Code of Conduct
Behaving ethically is an essential part of working for the Company. It is fundamental
to how the Company does business and is vitally important to the reputation and
success of the Company.
Board Members and Company Staff will at all times conduct themselves in a manner
that:
Supports the objectives of the Company;
Serves the overall best interests of the Company rather than any particular
constituency;
Brings credibility and good will to the Company;
Respects principles of fair play and due process;
Demonstrates respect for individuals in all manifestations of their culture
diversity and life circumstances;
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Respects and gives fair consideration to diverse and opposing viewpoints;
Demonstrates due diligence and dedication in preparation for and attendance
at meetings, special events and in all other activities on behalf of the
Company;
Demonstrates good faith, prudent judgement, honesty, transparency and
openness in their activities on behalf of the Company;
Ensures that the financial affairs of the Company are conducted in a
responsible and transparent manner with due regard for their fiduciary
responsibilities and public trusteeship;
Avoids real or perceived conflicts of interest;
Conforms with the Articles of Association of the Company and the Policies
approved by the Board of Directors;
Publicly demonstrates acceptance, respect and support for decisions
legitimately taken in transaction of the Company’s business
2. The Board of Directors and Corporate Governance
2.1 The Company is managed by a Board of Directors who are appointed /
elected, serve terms and meet to carry out their business as defined in the
Articles of Association.
2.2 The Board of Directors is responsible for this Corporate Governance Code
and approving any changes thereto; and for supervising and controlling
the application of this Corporate Governance Code.
2.3 Board Member duties include:
2.3.1 Attending and participating in Board meetings to give an
independent opinion in respect of strategic issues, policy,
performance, accounting, resources, basic appointments and
standards of operation.
2.3.2 Giving priority to the interests of the company and its
shareholders.
2.3.3 Participating in the Board Committees.
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2.3.4 Follow up of the company’s performance in order to achieve
agreed objectives and purposes and oversee performance reports.
2.3.5 Empowering the Board and its Committees through utilization of
their skills and experience and the diversity of their competences
and qualifications through regular attendance, effective
participation, attendance at general assembly meetings and
developing a balanced understanding of shareholder and
stakeholder views.
2.3.6 Disclosing to the Company the nature of positions that he/she
assumes in companies and public institutions as well as other
obligations, their set term, and any change thereto, once it takes
place as well complying with the requirement of disclosure of
ownership of Company's shares as required by the relevant
regulatory authorities
2.3.7 Exercising vigilance for and declaring any apparent or real
conflicts of interest and refraining from voting or expressing
opinions on any resolution or issue where the Board Member is
subject to a conflict of interest.
2.3.8 Keeping informed of the articles of association and the laws and
rules under which the Company exists, its mission, values, code of
conduct and policies as they pertain to the duties of a Board
Member.
2.3.9 Maintaining the confidentiality of Company confidential
information that is reviewed and discussed in Board and
Committee Meetings.
2.3.10 Familiarize himself with the Company's business and its divisions
so as to be able to make informed decisions regarding the
Company.
2.4 Remuneration of Board Members shall be a percentage of net profit.
Moreover, the Company may pay ancillary expenses or fees or a monthly
salary in the amount fixed by the Board of Directors to any member if
such member works in any committee, exerts special efforts, or
undertakes additional duties for the company beyond his/her normal
duties as a member of the Board of Directors. In all cases, the
remunerations of Board Members may not exceed 10% of net profits,
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having deducted redemptions, reserve and distribution of profits of at least
5% of capital to shareholders.
2.5 The following Board Committees have been established: Finance & Audit
Committee; HR, Nomination & Remuneration Committee; and Investment
& Business Development Committee, with composition and charters as
defined in Annexes A through C hereto. The Board may also form other
specialized committees from time to time.
3. Internal Controls
The Company shall apply a precise internal control system that aims at developing
an assessment of the company’s risk management means and measures, sound
application of governance rules, verification and compliance by the company and its
employees with applicable laws, regulations and resolutions that govern its
operations, as well as internal procedures and policies and review of financial
information that is forwarded to the company’s senior management and used for
drafting financial statements. The Board of Directors shall issue and revise annually
an internal control system to be implemented by an internal control department.
The Board shall oversee the Internal Control system as defined in the Articles of
Association and it shall publish the results to the shareholders of its annual review of
the internal control system and the extent to which the Company adheres to said
system.
4. External Auditor
The Board of Directors shall nominate an external auditor who is independent of the
Company and its Board of Directors at the recommendations of the Finance and
Audit Committee based on efficiency, reputation and experience. Appointment shall
be made and remunerations shall be fixed by a resolution of the General Assembly of
the Company. The External Auditor shall perform duties and report results and
findings as defined in the Articles of Association, the UAE Ministry of Economy
Ministerial Resolution No. 518 and other applicable regulatory body requirements.
5. Dealing in ADSB shares
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ADSB is a listed company with publicly traded shares. Accordingly, all Board
Members and employees of the Company with access to information relating to the
Company that, if misused, may be capable of creating a false market in such shares,
shall comply with applicable laws and regulations in relation to the use of such
information.
6. Environment & Community Service
The Company recognises that its operations impact the environment. Accordingly,
the Company shall comply with all applicable Government environmental laws and
regulations and practice environmental management to include the efficient
management of resources and the reduction of waste.
ADSB also recognises its role as part of the wider community of organizations and
individuals in the UAE. The Company will work in cooperation with local educational
institutions and the relevant Government organizations like the Abu Dhabi Tawteen
Council in order to create long term employment opportunities for UAE Nationals. In
addition, the Company has, and will continue, to support worthwhile charitable
organizations as part of its commitment to community service.
7. Health and Safety
The Company shall implement appropriate policies and procedures for health and
safety management and maintain a Health and Safety Management System that
promotes health and safety awareness, communicates health and safety objectives,
provides for the maintenance of a safe working environment and safe working
practices, the mitigation of risks in the working environment and in working practices
and the continued identification and elimination or control of hazards and compliance
with health and safety laws, regulations and international standards.
8. Delegation of Management
The Board of Directors may delegate to a Board Member or the Executive
Management some administrative issues in which it has the authority to make a
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decision. In this case, it shall make clear directives with regard to management
powers, in particular such cases in which the management shall obtain the approval
of the Board of Directors before making any decisions or concluding any obligations
on behalf of the Company. Such delegations shall be defined in writing and
periodically reviewed by the Board of Directors.
9. Shareholders’ Equity
Shareholders shall have all share equity, in particular the right to receive a portion of
distributable profits, receive a portion of the company’s assets at liquidation, attend
General Assembly meetings, take part in deliberations, vote on general assembly
resolutions, dispose of shares, have access to the company’s financial statements
and reports and may request to peruse the Company’s records and documents at the
permission of the Board of Directors or the General Assembly pursuant to the
Company’s Articles of Association. The Company’s Articles of Association and
internal regulations shall include necessary procedures to ensure the exercise by all
Shareholders of all their regulatory rights and equity.
10. Appointment and Duties of the Compliance Officer
The Company shall appoint a Compliance Officer whose duties shall be to:
10.1 Assist the Chief Executive Officer in the timely preparation and
establishment of policies, procedures and processes implementing the
Code of Governance approved by the Board.
10.2 Verify the scope of the Company’s compliance with the Code of
Governance and the relevant issued laws, regulations and resolutions.
10.3 Ensure that the Company prepares, updates and delivers regular ethics
training for the Company’s personnel.
10.4 Establish criteria for and conduct internal audits and reviews of compliance
processes.
10.5 Prepare for review and approval of the Board of Directors an Annual
Governance Report to the shareholders regarding the Company, disclosing
the extent of compliance by the Company with the Internal Control
regulations during the period covered by the report.
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10.6 Serve as primary point of contact for receiving all reports on matters of
interest concerning potential violations or failures to maintain compliance
with issued laws, regulations and resolutions.
10.7 Investigate allegations of non-compliance with the Code of Governance,
laws, regulations and Company policies and report results of investigations
to the Company’s legal counsel (if necessary, e.g. to preserve privilege) or
otherwise to the Chief Executive Officer.
10.8 Prepare and submit to the Company’s legal counsel (if necessary, e.g. to
preserve privilege) or otherwise to the Chief Executive Officer any
potential acts of non-compliance with UAE and other countries’ applicable
laws and regulations in order to determine if further action is required.
10.9 Report to the Chief Executive Officer, however, if the Chief Executive
Officer fails to act on issues of non-compliance or if allegations concern the
Chief Executive Officer’s actions, report directly to Board of Directors.
10.10 Report to Board Finance & Audit Committee and/or the Board HR,
Nomination & Remuneration Committee upon request.
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Annex A
ADSB Board Finance and Audit Committee
Committee Composition Requirements:
Not less than 3 Non Executive Directors, the majority of which are
Independent
Including a Financial and Accounting Expert
One or more non Company members may be appointed, but no previous
partner of the current external auditor (Ernst & Young)
The Committee may utilize consulting experts as and when necessary
The Head of the Committee must be Independent
The Board Chairman may not be a member
Committee Meeting Requirements:
Meetings to be held at least once per Quarter
Minutes to be kept. Once approved, copies of Minutes shall be provided to
each Committee member
Committee Charter:
Develop and apply the policy for contracting the External Auditor and make a
report to the Board of Directors to set forth the issues in respect of which an
action shall be adopted together with recommendations on necessary to-be-
adopted steps
To follow up and oversee the independence and objectivity of the External
Auditor and to hold discussions with the External Auditor on nature, scope
and efficiency of auditing pursuant to approved audit standards
To oversee the integrity of and review the financial statements and the
annual, semi-annual and quarterly reports in the course of its operations
during the year and shall, in particular, focus on:
Any changes to accounting policies and practices
Highlighting matters that are subject to Management’s discretion
Material amendments emerging out of auditing
Presumption of the company’s continued operations
Adherence to the accounting criteria set by the Securities and
Commodities Authority
Adherence to the Listing and Disclosure Rules as well as other financial
reporting legal requirements
To coordinate with the Board of Directors, Executive Management and the
Financial Manager in order to accomplish its tasks and to meet with the
External Auditors at least once per annum
To consider any outstanding unconventional issues that are or have to be
contained in these reports and accounts and pay necessary attention to any
issues raised by the Financial Manager of the Company, the manager
assuming the same duties, the Compliance Officer, or the External Auditor
To review the Company’s financial control, internal control and risk
management systems
To discuss the Internal Control system with the Management and make sure
that if fulfils its duty to develop an effective Internal Control system
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To consider the findings of main investigations in Internal Control issues to be
assigned thereto by the Board of Directors or at the initiative of the
Committee upon the approval of the Board of Directors
To ensure coordination between the Internal and External Auditors, ensure
availability of necessary resources for the internal audit body, review and
control the efficiency of this body
To review the Company’s financial and accounting policies and procedures
To review the mission and action plan of the External Auditor and any
material issues raised by the auditor to the Management in respect of
accounting records, financial accounts or control systems, respond thereto
and approve the same
To make sure the Board of Directors responds on a timely basis to inquiries
and material issues raised in the External Auditor’s report
To develop rules that enable the employees of the Company to secretly report
any potential violations in financial reports, internal control or other issues
and adequate steps to conduct independent, fair investigations into these
violations
To oversee the scope of the Company’s compliance with the Code of Conduct
To ensure application of rules of rules of operation in connection with their
duties and powers assigned thereto by the Board of Directors
To submit a report to the Board of Directors on the matters contained in this
Charter
To consider other issues as determined by the Board of Directors
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Annex B
ADSB HR, Nomination & Remuneration Committee
Committee Composition Requirements:
Not less than 3 Non Executive Directors, the majority of which are
Independent
The Head of the Committee must be Independent
The Board Chairman may not be a member
Committee Meeting Requirements:
Meetings to be held at least once per Quarter
Minutes to be kept. Once approved, copies of Minutes shall be provided to
each Committee member
Committee Charter:
Verification of ongoing independence of Independent Board Members
Formulation and annual review of the policy on granting remunerations,
benefits, incentives and salaries to Board Members and employees of the
company, and, verification that remunerations and benefits granted to the
senior executive management of the company are reasonable and in line with
the company’s performance
Determination of the company’s needs for qualified staff at the level of the
senior executive management and employees and the basis of their selection
Formulation, supervision of application and annual review of the company’s
human resources and training policies
Organization and follow-up of procedures of nomination to the membership of
the Board of Directors in line with applicable laws and regulations including
UAE Ministry of Economy Resolution No. 518
Reviewing and assist the Management with its Emiratization initiatives
including seeking support from the Government or other relevant
organizations
To submit reports to the Board of Directors on the matters contained in this
Charter
To consider other issues as determined by the Board of Directors
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Annex C
ADSB Investment and Business Development Committee
Committee Composition Requirements:
Not less than 3 Non Executive Directors, the majority of which are
Independent
Members must not be employees, Board Members, or have financial interest
in other organizations with which the company competes, or with which the
Company may be likely to compete
Committee Meeting Requirements:
Meetings to be held at least once per Quarter
Minutes to be kept. Once approved, copies of Minutes shall be provided to
each Committee member
Committee Charter:
To review capital and other financial investments proposed by Management
for alignment with company strategy and to confirm assumptions made for an
acceptable return on investment
To review and make recommendations to the Board regarding any proposed
joint ventures, mergers or acquisitions
To annually review, control, apply and revise as necessary the Marketing and
Business Development policies and strategies
To provide strategic guidance and assistance to the Marketing Division
To review and assist the Management with its Marketing and Sales initiatives
including seeking support from the Government or other relevant
organizations
To submit a report to the Board of Directors on the matters contained in this
Charter
To consider other issues as determined by the Board of Directors
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