“APPROVED”
by General Meeting of Shareholders Republican Stock
exchange "Toshkent"
December 28, 2019
Protocol No. 4
REGULATIONS ON THE SUPERVISORY BOARD
Joint stock company
Republican Stock Exchange
TOSHKENT
Tashkent - 2019
TABLE OF CONTENTS
1. General Provisions
2. Competence of the Supervisory Board
3. Election, appointment and early termination of powers of members of the supervisory board
4. Chairman of the Supervisory Board
5. Supervisory Board meeting
6. Rights and obligations of members of the supervisory board
7. Responsibility of members of the supervisory board
8. The procedure for determining the amount of remuneration to members of the supervisory board
9. Final Provisions
1. GENERAL PROVISIONS
1. This provision has been developed in accordance with the Law of the Republic of Uzbekistan
“On Joint-Stock Companies and the Protection of Shareholders' Rights”, other legislative acts, the charter of the joint stock company RSE “TOSHKENT” (hereinafter referred to as the Company), the Corporate Governance Code, and Corporate Governance Rules for enterprises with state participation determine the status and regulate the work of the supervisory board of the company, electing it members, as well as their rights and obligations.
2. The Supervisory Board carries out general management of the company, with the exception of resolving issues referred by law and the charter of the company to the competence of the general meeting of shareholders.
3. The distribution of functions between members of the supervisory board is carried out by the chairman of the supervisory board specifically for each member of the supervisory board.
4. Members of the Supervisory Board are elected at general meetings of shareholders for a period determined by law and the charter of the company.
5. The Supervisory Board of the company provides the interaction between shareholders, members of the organs of management and control of society on the basis of the principles of mutual trust, respect, accountability and control
2. COMPETENCE OF THE SUPERVISORY BOARD
4. The competence of the supervisory board of the company includes:
· determination of the priority areas of the company’s activity with regular listening to the report of the executive body of the company on measures taken to achieve the development strategy of the company;
· convocation of annual and extraordinary general meetings of shareholders, with the exception of cases provided for by part eleven of article 65 of the Law of the Republic of Uzbekistan “On joint-stock companies and protection of the rights of shareholders”;
· preliminary consideration of issues introduced in the agenda of the day of general meeting of shareholders, to determine the date, time and place of the General Meeting of Shareholders;
· determination of the date of formation of the register of shareholders of the company to notify of the general meeting of shareholders;
· introducing for the decision of the general meeting of shareholders the issues stipulated by the second paragraph of the first part of Article 59 of the Law of the Republic of Uzbekistan “On joint-stock companies and protection of the rights of shareholders”;
· organization of establishing the market value of property;
· organization of a competition for the position of the head of the executive body and its members, with the approval of the rules for competitive selection for managerial positions with a description of the procedures for announcing the competition, objective selection criteria, hiring new, modern-minded, highly qualified managers who meet modern requirements, as well as foreign managers;
· the establishment of remunerations and (or) compensations paid to the executive body of the company , as well as their maximum amounts with reference to the specified payments, to the implementation of key performance indicators established by the Cabinet of Ministers of the Republic of Uzbekistan dated July 28, 2015. No. 207 “On the introduction of criteria for evaluating the performance of joint-stock companies and other business entities with a state share”;
· appointment of a corporate consultant and approval of a regulation determining the procedure for its activities;
· approval of the company's annual business plan. Moreover, the company's business plan for the next year should be approved at a meeting of the company's supervisory board no later than December 1 of the current year;
· the creation of an internal audit service and the appointment of its employees, as well as the quarterly hearing of its reports;
· maintains a list of the key indicators of the effectiveness of activities (KPI) of JSC RSE "Tashkent", and identifies the key risks;
· sets forecast (target) KPIs at a level not lower than the normative value established by the legislation (if the normative value is established for the indicator by the legislation). If legislation does not provide a normative value for an indicator, then an organization (consultant) may be involved in determining the forecast (target) value;
· organizing committees (working groups), consisting of members of the Supervisory Board, the executive body, the company employees and external experts (relevant experts, university professors in the field and others.) on the identification and solution -related issues, in that those conflicts and other issues ;
· pre- approves the annual report of JSC RSE "Tashkent" not later than for 30 days prior to the date of the General Meeting of Shareholders;
· determines the list of information constituting a commercial secret of the company;
· approves the forecast indicators of the business plan for the next year;
· approves the annual cost estimate of the internal audit service ;
· conducts annual certification of employees of the internal audit service ;
· giving recommendations on the amount of remuneration and compensation paid to members of the audit commission of the company ;
· giving recommendations on the size of dividends, the form and procedure for their payment;
· use of reserve and other funds of the company;
· establishment of branches and opening representative offices of the company ;
· creation of subsidiaries and affiliates (they are created in the form of a joint stock company or limited liability company);
· making decisions on the creation of other trust funds;
· deciding on a major transaction the subject of which is property, the carrying cost or cost of acquisition which is from fifteen to fifty percent of the size of the net assets of the company on the date of the decision on such transaction in accordance with Chapter 8 of the Law "On Joint-Stock Companies and protecting the rights of shareholders ”;
· making decisions on transactions with an affiliate of the company in accordance with Chapter 9 of the Law of the Republic of Uzbekistan “On Joint-Stock Companies and Protection of Shareholders Rights ”;
· conclusion of transactions related to the participation of the company in commercial and non-commercial organizations in the manner prescribed by law;
· making decisions on the issue by the company of corporate bonds, including convertible into shares;
· making decisions on the issue of derivative securities;
· decision-making on the redemption of corporate bonds of the company ;
· making decisions on issues of increasing the authorized capital (authorized capital) of the company, as well as issues of amendments and additions to the charter of the company, associated with an increase in the authorized capital (authorized capital) of the company and a decrease in the number of authorized shares of the company;
· approval of the decision to issue securities (shares, bonds) and the prospectus;
· introduction of changes and (or) additions to the decision on the issue of securities (shares, bonds) and the prospectus and approval of their text;
· determination of the offering price (putting up on the stock exchange and organized over-the-counter securities market) of shares in accordance with Article 34 of the Law of the Republic of Uzbekistan “On Joint-Stock Companies and Protection of Shareholders Rights ”;
· approval of regulations on information policy;
· decision-making on charity (sponsorship) or gratuitous aid of a size which is more than one percent of the size of the company's net assets at the date of the decision;
· attracting an independent organization on the basis of the competition to assess the corporate governance system in the company;
· preparation of the procedure in accordance with which transactions between affiliates and the company are carried out on market conditions
· control over the correct formation of the list of affiliated persons
· creates effective mechanisms to prevent transactions with affiliates that do not comply with market conditions, including transaction value
· implementation of the requirement for independent resolution by the executive bodies of issues within their competence for the unconditional fulfillment of the tasks set by the supervisory board, general meeting of shareholders, the charter and development strategies of the company ;
· creates a system of rational internal control, which will include sound policies and procedures and a system of checks and balances in order to ensure compliance with the fundamental principles of honesty and acceptability: objectivity, honesty and general compliance with legislation, rules and regulations that are applied by society;
· controls the processes of information disclosure and communication, ensuring that the financial statements fairly represent the view of the company and reflect the perceived risks;
· considers the assessment of compliance with the recommendations of the Rules in the form according to the appendix
5. The Supervisory Board of the company for the implementation of the recommendations of the Code of Corporate Governance provides:
· coordination of the activities of the executive body, internal control bodies of the company, collegial bodies created in the company, and, if necessary, the involvement of experts to organize the development of plans for the development of the company and monitor the achievement of their goals;
· coordination of work on the development, implementation and regular assessment of the conformity of the organizational structure of AO with legislative requirements, as well as on ensuring the transition to the publication of annual financial statements in accordance with International Financial Reporting Standards;
· monitoring the implementation of the recommendations of the Corporate Governance Code .
6. To the competence of the supervisory board of the company can be classified as a decision and other issues in accordance with law and the charter company.
7. Matters related to the competence of the supervisory board of the company cannot be referred to the decision of the executive body of the company.
3. ELECTION, PURPOSE AND EARLY TERMINATION OF MEMBERSHIP
SUPERVISORY BOARD
8. The members of the supervisory board of the company are elected by the general meeting of shareholders in the manner prescribed by law and the charter of the company for a period of one year.
9. The quantitative composition of the supervisory board of the company is determined by the charter of the company. At the same time, the company includes at least one independent member in the composition of the supervisory board (but not less than 15% of the number of members of the supervisory council stipulated by its charter ). In case of non-nomination of an independent member of the company, publishes information on the reasons for not observing this recommendation of the Code.
10. The criteria for independent members of the supervisory board are defined in the Corporate Governance Code .
11. Persons elected to the supervisory board of a company may be reelected indefinitely.
12. The head of the executive body of the company and its members cannot be elected to the supervisory board of the company.
13. Members of the supervisory board of a company may not be persons working under an employment contract (contract) in the same company.
14. The early termination of powers of an elected member of the supervisory board is carried out by decision of the general meeting of shareholders when the shareholder is changed, the member of the supervisory board violates his duties, there is a corresponding statement from the supervisory board and other grounds.
15. Persons elected to the Supervisory Board of the company must meet certain qualification requirements (commercial, financial and industry experience) and have the qualification certificate of the corporate manager issued by the Scientific and Educational Center for Corporate Governance. The company carries out annual advanced training of members of the supervisory board by organizing seminars on issues of the company's activities , and sending them to special training courses on corporate governance.
16. Elections of members of the supervisory board of the company are carried out by cumulative voting.
17. If the number of votes held by each shareholder is multiplied by the number of persons to be elected to the Company's Supervisory Board, and the shareholder has the right to give obtained in such a way voice completely for one candidate or distribute them among two or more candidates.
18. The candidates with the highest number of votes are considered elected to the Supervisory Board .
19. The representative of the state is a member of the supervisory board of the company , is not subject to election (re-election) by the general meeting of shareholders.
4. CHAIRMAN OF THE SUPERVISORY BOARD
20. The chairman of the supervisory board of the company is elected by the members of the supervisory board from among its members by a majority of votes of the total number of members of the supervisory board.
21. The company’s supervisory board has the right to re-elect its chairman by a majority of the total number of members of the supervisory board.
22. The chairman of the supervisory board of the company organizes its work, convenes meetings of the supervisory board and presides over them, organizes protocol maintenance at meetings, and chairs the general meeting of shareholders.
23. In the absence of the chairman of the supervisory board of the company, his functions are performed by one of the members of the supervisory board.
5. MEETING OF THE SUPERVISORY BOARD
24. A meeting of the company’s supervisory board is convened by the chairman of the supervisory board on his own initiative, at the request of a member of the supervisory board, the audit commission, executive body and shareholders (shareholder), who in aggregate own at least one percent of the company's voting shares .
25. A meeting of the company's supervisory board is convened by the chairman of the supervisory board at least once a quarter. At a meeting, it is mandatory to consider:
· report of the executive body on the implementation of the annual business plan of the company, on measures taken to achieve the development strategy of the company, on the work done and achievement of performance indicators of the enterprises included in the company, approved by their business plans, as well as other internal documents of the company ;
· report of the internal audit service ;
· conclusion of the audit commission on the existence of transactions with affiliates or major transactions in the company, as well as compliance with the requirements of the law and internal documents of the company for such transactions.
26. The quorum for holding a meeting of the supervisory board of the company must be at least seventy-five percent of the number of elected members of the supervisory board of the company.
27. In the event that the number of members of the supervisory board becomes less than seventy-five percent of the amount provided for by the charter, the company is required to convene an extraordinary general meeting of shareholders to elect a new composition of the supervisory board of the company. The remaining members of the supervisory board have the right to decide on the convening of such an extraordinary general meeting of shareholders, as well as in the event of early termination of powers of the chairman of the supervisory board, to appoint a temporary acting one .
28. Decisions on the meeting of the Supervisory Board of the company adopted a majority vote of those present, for the exception of the cases envisaged by the Law of the Republic of Uzbekistan "On joint-stock companies and protection of shareholders' rights" and the company's charter. When resolving issues at a meeting of the company's supervisory board, each member of the supervisory board has one vote. The chairman of the supervisory board of the company has a casting vote in the event of a tie vote of members of the supervisory board. The decision on the issues of increasing the authorized fund (capital) of the company and the introduction of appropriate amendments to the charter are adopted unanimously by the supervisory board of the company.
29. The transfer of a vote by one member of the supervisory board of the company to another member of the supervisory board or to a third party is not allowed.
30. At a meeting of the supervisory board of the company, a protocol is kept . The minutes of the meeting of the supervisory board shall be drawn up no later than ten days after its holding.
31. The minutes of the meeting shall indicate:
· date, time and place of its holding;
· persons present at the meeting;
· meeting agenda ;
· issues put to a vote, results of voting on them;
· adopted solutions.
32. The minutes of the meeting of the supervisory board of the company shall be signed by the members of the supervisory board of the company participating in the meeting who are responsible for the correctness of the protocol.
33. The minutes of the meeting of the supervisory board of the company shall be submitted for execution to the Chairman of the board of the company on the day of its signing. If the supervisory board decides to convene a general meeting of shareholders, information about this decision is transmitted to the Chairman of the company's board on the day of the meeting of the supervisory board
34. A meeting of the supervisory board may be held by polling, with the exception of a meeting in which reports of the audit commission, internal audit service, and executive body are heard . At the same time, decisions of the company's supervisory board may be adopted by absentee vote (by poll) by all members of the supervisory board unanimously.
In the presence of technical means, means of identification of members of the Supervisory Board and other equipment, meetings of the Supervisory Board may be held in video conferencing mode .
6. RIGHTS AND OBLIGATIONS OF MEMBERS OF THE SUPERVISORY BOARD
35. A member of the supervisory board has the right:
· to personally take part in the meeting of the supervisory board, to speak on the issue discussed at the meeting within the time allotted by the regulations ;
· by decision of the supervisory board, receive information on the activities of the company for a certain period of time, on plans for its development;
· receive remuneration and (or) compensation for expenses for work in the supervisory board in the manner prescribed by law and internal documents of the company;
· to have access to any documents relating to the activities of the executive body of the enterprise, and to receive them from the executive body to fulfill the duties assigned to the supervisory board of the enterprise. The received documents can be used by the supervisory board of the enterprise and its members solely for official purposes;
· to create committees (working groups) under the supervisory board on relevant issues, including a committee on conflict situations, on audit, human resources, etc., from among the members of the supervisory board, executive body, AO staff, and involved experts (specialists of the corresponding profile, teaching the composition of specialized higher educational institutions and others);
· other rights provided by law and the charter of the company;
36. A member of the supervisory board must:
· inform the company of its affiliation in the transaction by the company by sending a written notice detailing information about the proposed transaction, the essential conditions of the relevant agreement.
· to carry out their official duties in good faith, but also the way he considers best in the interests of society;
· disclose information about any interest in any transaction or in a matter related to the company (if any);
· other duties stipulated by the legislation and the charter of the company.
37. Members of the supervisory board are not entitled to use the opportunities of the company (property or non-property rights, opportunities in the field of economic activity, information about the activities and plans of the company) for personal enrichment.
7. RESPONSIBILITY OF MEMBERS OF THE SUPERVISORY BOARD
38. The members of the Supervisory Board of the company with the implementation of their rights and performing their duties shall act in the public interest and shall be responsible to the community in accordance with law and the charter company.
39 In the event that several persons bear responsibility, their responsibility to society is joint and several.
40. Members of the supervisory board who did not vote or voted against a decision that caused the company to incur losses are not liable, except as provided for in article 90 of the Law of the Republic of Uzbekistan “On Joint-Stock Companies and Protection of Shareholders' Rights”.
41. A company or a shareholder (shareholders) owning in aggregate at least one percent of the placed shares of a company is entitled to apply to the court with a member of the supervisory board for compensation for losses incurred by the company .
42. The powers of the supervisory board member may be terminated by the court, with a ban on the activity leading positions in economic societies in the period of not less than one year in the case of recognition by the court of his guilt in causing property damage to society.
43. A member of the supervisory board may be held liable for damage caused to the company as a result of the provision of misleading information or deliberately false information or a proposal to conclude and (or) make decisions on the conclusion of a major transaction and (or) a transaction with affiliates for the purpose receipt by them or their affiliates of profit (income).
8. SIZING PROCEDURE
REMUNERATIONS TO MEMBERS OF THE SUPERVISORY BOARD
44. The effectiveness of the Supervisory Board is determined based on the results of compliance with the recommendations of the Corporate Governance Rules for enterprises with state participation
45. Members of the Supervisory Board are paid remuneration based on the results of an independent assessment of the corporate governance system and financial results of the company .
46. The company annually conducts an independent assessment of the corporate governance system and financial results of the company.
47. The results of an independent evaluation serve as the basis for determining the amount of remuneration paid to the chairman and members of the supervisory board.
48. In accordance with an agreement with an independent organization, the results of the activities of the Supervisory Board may be considered unsatisfactory, low, satisfactory and high.
49. Remuneration to the members of the supervisory board is paid once at the end of the year, the amount of which is approved by the general meeting of shareholders and cannot exceed 50 minimum wages established in the Republic of Uzbekistan for each member of the supervisory board. At the same time, by decision of the General Meeting of Shareholders, a raising factor for remuneration paid to the chairman of the supervisory board in the amount of not more than 1.2 times the amount paid to a member of the supervisory board may be established .
9. FINAL PROVISIONS
50. The corporate consultant is responsible for providing the members of the supervisory board with the necessary materials, as well as for relations with shareholders and investors .
51. Persons guilty of violating the requirements of this Regulation are liable in the prescribed manner.
52. If individual articles of these Regulations conflict with the current legislation of the Republic of Uzbekistan and / or the Charter of the Company, these articles lose their force and in terms of the issues regulated by these articles should be guided by the norms of the current legislation of the Republic of Uzbekistan and / or the Charter of the Company until the relevant amendments to these Regulations .
