Mannai Q P S C : Corporate Governance Report 2023

Mannai Corporation QPSC

www.mannai.com

Corporate Governance Report 2023

MANNAI CORPORATION QPSC

CORPORATE GOVERNANCE REPORT

1st January - 31st December, 2023

With reference to:

• The Governance Code for Companies & Legal Entities Listed on the Main Market (hereinafter referred to as the "Code"), issued on 10 November, 2016 by Qatar Financial Markets Authority (hereinafter referred to as the "Authority") pursuant Authority's Board Decision No.
  5 of 2016 ; and
• Provisions of Article (2) of the Code which provides for the application of the principles and provisions of the Code to all companies and legal entities listed on the main market unless there is a special provision on this regard stipulated in any of the Authority's Legislations; and
• Provisions of Article (4) of the Code, which requires preparation of a Corporate Governance report to be signed by the Chairman of the Board of Directors, that includes Company's disclosure on its compliance with implementation of the provisions of the Code and all the information regarding the implementation of its principles and provisions referred to in the said Article, which report shall be held as an inseparable part of the Annual Report of the company.
  THEREFORE
• The Board of Directors of Mannai Corporation QPSC (hereinafter referred to as the "Board of Directors") has prepared this Corporate Governance Report of Mannai Corporation QPSC (hereinafter referred to as the "Company") for the period from 1st January to 31st December, 2023, guided by the principles and provisions of the Code, the related laws and regulations, circulars issued by the Authority, Company's Articles of Association, sound Corporate Governance practices, the Management's sound applications, and Corporate Governance standards. Through this Corporate Governance Report, the Company will keep the shareholders, other stakeholders and the public at large abreast of all its policies and practices in order to enable them to assess abidance of the Company by the Code and Corporate Governance principles in general.

1. PREAMBLE:

The Board of Directors has complete and absolute belief that the sound application of Corporate Governance rules and procedures leads to achievement of high and continuous growth, quality and excellence in performance, and also results in increased trust in the Company and aims to protect the interests of minorities and small shareholders, in addition to generating profits and providing job opportunities, reducing risk, and increasing performance competency and accountability.

Hence, the Board of Directors, following listing of the Company in Qatar Stock Exchange in 2007, appreciated the importance of the principles of Corporate Governance and recognized the importance of their application - even before issuance of the first Corporate Governance Code in the State of Qatar- as it was mentioned in the Report of the Board of Directors for the year 2007, under the title- Summary of 2007, and the way ahead: "… expansion of the Board of Directors and strengthening Corporate Governance in the Company."

The Board of Directors called for initiating the structuring of its corporate governance procedures in line with the principles of the Code. Believing in the importance of corporate governance, the Board of Directors formed an ad hoc committee assigned with overseeing matters related to Corporate Governance. On December 3, 2009, the Board of Directors assigned the Corporate Governance Committee with enabling the Board of Directors, through

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good Corporate Governance, to add value to the Company and its reputation among its shareholders, related parties and stakeholders, and to always keep Directors abreast with the latest Corporate Governance developments and best practices to ensure the Directors' understanding of their roles in Corporate Governance process and to ensure that the Board of Directors complies with relevant laws, regulations and codes of practice. The Committee consults legal advisors of the Company from time to time regarding provisions of the Code.

In order to ensure Company's full commitment in performing its responsibility by ensuring its implementation to the letter and spirit of the Code, the Board of Directors called for an Extraordinary General Assembly meeting of the Company held on 27th March, 2019 to amend the Articles of Association, a process which the Company started in the Extraordinary General Assembly meeting held on 3rd December, 2017 to fall in line with the Code, whereby the Assembly approved all proposals of the Board of Directors in this respect. Subsequently, on 19th April, 2020, and 26 April, 2022 respectively the Extraordinary General Assembly of the Company was held to finalize the process of the amendment of the Articles of Association to fully comply with the Code and the amendments to provisions of the Commercial Companies Law.

2. COMPANY'S PHILOSOPHY ON CORPORATE GOVERNANCE

Corporate Governance means the following to the Board of Directors:

1. Method by which the Company practices its power to manage all its assets, and human and physical resources,
2. Management's appreciation of the shareholders' rights in their capacity as the owners of the
   Company,
3. Compliance with the rules, procedures, values, and moral and professional behaviour in practice of management and business, and taking sound decisions regarding the affairs of the Company,
4. Distribution of the rights and responsibilities between the different stakeholders and related parties in the Company.

In light of the above, the Board of Directors believes in the sound application of Corporate Governance and continuous development of Corporate Governance practices to suit the changing requirements and commitment to continuously review the Corporate Governance practices. The Board of Directors strongly believes in following the fundamental values of Corporate Governance in managing the Company, which are discipline, transparency, disclosure, independency, accountability, responsibility, fairness, social responsibility and accuracy in financial statements. The Board of Directors also tries to concentrate on the pillars of Corporate Governance, which are moral behaviour, strengthening roles of stakeholders, related parties and risk management.

Moreover, the Board of Directors fully realizes that implementation of Corporate Governance in the Company in a correct way does not mean mere respect of a set of rules and provisions, but it is also a culture and method in controlling the relationship between the shareholders, Board of Directors, Senior Executive Management, employees, and everyone dealing with the Company, so that the shareholders ensure that the Management makes right use of their property to optimize profitability and achieve effective control. All this is reflected in what is called "The Mannai Way."

Towards promotion of the highest Corporate Governance standards and consolidation of principles of the Code, the Board of Directors passed a number of resolutions represented in various regulations, charters, procedures, controls, policies, mechanisms and rules which are as follows:

1. Company Corporate Governance Code.
2. Board Charter.
3. Stakeholders' rights Policy.
4. Procedures Manual for Implementing Strategy and Objectives.

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1. Disclosure System
2. Policies & Procedures of the Company's Compliance with the Laws and Regulations & the Company's Obligation to Disclose Information.
3. Procedures for Availing Financial Services, Financial Analysis, Credit Rating etc.
4. Procedures for Nominating & Engaging External Auditors.
5. Procedures for Orienting New Board Members.
6. Self-controland Risk Management Programs.
7. Foundations and Standards for Evaluating the Performance of the Board and Senior Executive Management.
8. Rules & Procedures Regulating Insiders' Trading of Company Securities.
9. Policies and Procedures for Related Party Transactions
10. Whistle-blowingPolicy
11. Dividend Policy.
12. Succession Planning Policy.
13. Internal Control System Framework.
14. Compliance Management Framework.
15. Risk Management Policy.
16. Risk Management Procedures.
17. Company Policy for Dealing with Rumors
18. Code of Business Conduct & Ethics

In this respect, the Board of Directors confirms that the Company, going forward, will not spare any efforts towards implementing the letter and spirit of the Code provisions, guided by corporate governance culture and international standards.

3. BOARD CHARTER

As required in the provisions of Article (8) of the Code, the Board of Directors has adopted a "Board Charter" which sets out, among other things, the functions of the Board of Directors and the rights, duties and responsibilities of the Chairman and members of the Board of Directors in accordance with provisions of the Law and the Code. The Charter has been published on the website of the Company for ready reference of the public.

4. BOARD OF DIRECTORS:

The Board Charter and the Articles of Association of the Company have provided for functions and responsibilities of the Board of Directors as it is responsible for managing the company, setting its goals and strategies, and monitoring their implementation by the Senior Executive Management in accordance with the aforesaid functions, responsibilities, powers and duties of the Board of Directors, and each of the Chairman and Board members in the provisions of the Code, Board Charter and Articles of Association of the Company.

The Board of Directors is assisted by a number of committees formed by resolutions passed by the Board of Directors in accordance with provisions of the Code, which resolutions have outlined terms of reference, duties, and work procedures of such committees. These committees comprise the Corporate Governance Committee, Audit Committee, Remuneration Committee and the Nomination Committee.

1. MISSION AND RESPONSIBILITIES OF THE BOARD OF DIRECTORS:

In compliance with the provisions of Article (9) of the Code, the provisions of Articles (30) and (31) of the Company's Articles of Association provide that the Board of Directors is assigned with the responsibility of managing and supervising the Company. It has the broadest scope of authorities for the same and shall be entitled to assume all activities required for such management in accordance with the law, the Company's Articles of Association, and resolutions of the General Assembly, in addition to appointing the senior executive management. Moreover, the Board of Directors may sometimes delegate some of its functions for a limited period to undertake specific

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operations and constitute ad hoc committees, and in this event, the Board of Directors remains liable for the functions it has delegated.

1. DUTIES OF THE CHAIRMAN OF THE BOARD OF DIRECTORS:

The Chairman of the Board of Directors is the head of the Company and shall represent it before third parties, and his signature shall be held as signature of the Board of Directors in the Company's relations with third parties, and he shall execute resolutions of the Board of Directors as provided for in Article (28) of the Company's Articles of Association. In light of Article (III) of the Board Charter, the Chairman is responsible for ensuring the proper functioning of the Board of Directors, and has the right to call for Board meetings in accordance with provisions of Article (32) of the Company's Articles of Association ensuring the discussion of all important points, approving the agenda of every meeting of the Board of Directors, promoting constructive relations between all the Board members, encouraging Board members to effectively participate in dealing with the affairs of the Board of Directors, and facilitating timely receipt of complete and accurate information by Board members. The Chairman of the Board of Directors is not a member in any of the Committees of the Board of Directors and does not combine Chairmanship of the Board of Directors and any executive position in the company.

1. BOARD OF DIRECTORS' OBLIGATIONS:

In compliance with the provisions of Article (12) of the Code relating to obligations of Members of the Board, each Board Member shall observe all provisions of the said article. The Board of Directors constantly invite, in accordance with provisions of Article (36) of the Company's Articles of Association, some of the Company's senior executive managers, employees or other experts to attend the Board meetings in order to provide some information or explanations to enable the Board of Directors to act effectively to fulfill their responsibilities towards the Company on the basis of clear and sufficient information, in good faith, with due diligence and care, and in the best interests of the Company and all shareholders. In accordance with provisions of Article (12/8) of the Code, the Board of Directors has appointed Mr. Santhosh Krishnamoorthy, Chief Financial Officer, as an official Spokesperson of the Company, to deal with any matters relating to company news in the public domain, communicate with official authorities, and clarify the company's position if any rumors are circulated about the company.

1. BOARD COMPOSITION:

In the presence of representatives of Ministry of Commerce & Industry, the Board of Directors is elected by the General Assembly of shareholders in accordance with the requirements and rules set forth in the Code, the Commercial Companies Law and provisions of the Company's Articles of Association, in particular provisions of Article (26) thereof. The current term of the Board of Directors expires by holding the annual General Assembly in 2025.

The Board Members have adequate expertise and knowledge to effectively perform their functions. The current Board of Directors composition includes executive and non-executive directors and the majority is non-executive.

Below are names, capacities and titles of the Chairman and members of the Board of Directors:

S#	Name	Entity Represented	Title	Category
1	HE Sheikh Hamad Bin Abdulla	Qatar International Real Estate	Chairman	Non-executive
	Bin Khalifa Al Thani	Investment Co. WLL
2	HE Sheikh Suhaim Bin Abdulla	Qatar Investment and Projects	Vice Chairman	Executive
	Bin Khalifa Al Thani	Development Holding Company
		(QIPCO) WLL
3	HE Sheikh Khalifa Bin Abdulla	Himself	Director	Independent
	Bin Khalifa Al Thani
4	HE Sheikh Tamim Bin Abdulla	Himself	Director	Independent
	Bin Khalifa Al Thani

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5	Mr. Mohammed Ali M.K. Al	Specialized Projects Co.		Director	Non-executive
	Kubaisi
6	Mr. Ali Yousuf Hussein Ali	Al Sakhama Trading & Contracting	Director	Non-executive
	Kamal	Co. WLL
7	Mr Khalid Sultan Al Rabban	Qatar Investment Authority	Director	Non-executive
8	Mr. Mohammed Yousuf	Himself		Director	Independent
	Hussein Ali Kamal
9	Mr. Abdulla Mohammed Ali	Grand Business Services Co. WLL	Director	Non-executive
	Mohammed Al Kubaisi
10	Mr. Keith John Higley	Qatar Investment and	Projects	Director	Executive
		Development Holding	Company
		(QIPCO) WLL

The present Board composition, however, ensures non-control by one or more Board members in issuing decisions, in accordance with Article (6) of the Code.

The Directors are qualified in various specializations. The Board efficiently shoulders its responsibilities and follows up the laws and regulations passed from time to time by the official regulatory and supervisory authorities to ensure Company's compliance with such laws and regulations.

In 2022 and in accordance with provisions of Article (7) of the Code, the Chairman and Members of the Board of Directors submitted Acknowledgments in which each of them confirmed he doesn't combine positions prohibited by the Code and the Law to be combined. Copies of such Acknowledgments are kept by Board Secretariat and the External Auditor reviewed and audited such Acknowledgments.

According to the provisions of Article (32)(1) of the Company's Articles of Association, the number of Board meetings shall not be less than six meetings in a fiscal year in compliance with the provisions of Article (14) of the Code. The Board of Directors held 6 meetings during 2023 on the following dates: 26th February, 2022, 30th April, 2023, 21st June, 2023, 14th August, 2023, 25th October, 2023, and 20th December, 2023.

In accordance with the provisions of Article 32 of the Company's Articles of Association, and in compliance with provisions of Article (13) of the Code, the Board meets upon invitation by its Chairman or at least two Board Members. The invitation for the Board meeting and agenda are communicated to each Board Member at least a week ahead, noting that any Board Member may add any item to the agenda.

In compliance with the provisions of Article (17) of the Code and according to the provisions of Article 32(5) of Company's Articles of Association, a Secretary complying with all mandatory regulatory requirements for the position has been appointed for the Board of Directors, whose functions include recording and safekeeping the minutes of all the Board meetings, and ensuring that the Board members have access to all the meeting minutes, information, documents and records of the Company. The Secretary of the Board carries out all the tasks mentioned in the said Article.

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1. OTHER BOARD FUNCTIONS & DUTIES:
   In compliance with provisions of Article (9) of the Code, we would like to point out to the following:
2. 1. The Board carries out its duties in a responsible manner, in good faith and with due diligence towards realizing Company interests.
   2. Directors have absolute access to all necessary information and documents relating to the Company.
   3. Members of the various committees, the Internal Auditor, and External Auditor always attend General Assembly meetings.
   4. The Board decisions are based on sufficient Information from the executive management.
   5. A Board member represents all shareholders.
   6. The Board has set out procedures for orienting the new Board members of the
      Company's business.
   7. The Board of Directors from time to time provides training courses for Directors in order to enhance their skills and professional knowledge. The Company not only provides such courses to Directors, but also to members of the Senior Executive Management team.
   8. The Corporate Governance Committee at all times keeps Directors updated about the latest developments in the area of Corporate Governance.
   9. In accordance with provisions of Article (14) of the Code, Article (33) of the Articles of
      Association of the Company contains rules governing Directors' unauthorized absence from Board meetings.
3. CHIEF EXECUTIVE OFFICER'S FUNCTIONS:
   The Board of Directors has appointed Mr. Michael Deeter as CEO for Qatar Operations.
   The CEO, represents the link between the Board of Directors and the Executive Management

and he is entrusted, among other tasks, with the following:

1. 1. Ensuring that the resolutions of the Board of Directors are properly implemented.
   2. Reviewing and discussing company strategies and plans submitted by the Management.
   3. Ensuring that work directives in general are in conformity with the goals set out by the Board of Directors.
   4. Providing the Board of Directors with periodical reports on performance of the company.
2. SENIOR EXECUTIVE MANAGEMENT RESPONSIBILITIES:
   The Senior Executive Management is entrusted with the responsibilities of carrying out the functions as directed by the Chief Executive Officer. Their responsibilities are clearly described in the job description with the company. They are empowered to do all such acts and deeds as may be deemed essential by them in discharging their responsibilities, subject to restrictions as specified in the operational manuals of the company such as the Authority Matrix, Employee Handbook, etc.
3. CONFLICT OF INTERESTS AND INSIDER TRADING

1. The Board of Directors has adopted and announced the rules relating to the Company's entering into any commercial transaction with a related party, to ensure that all transactions that involve potential related parties or conflicts of interest are determined on a fair, reasonable and consistent basis. According to the provisions of Article 35(5) of the Company's
   Articles of Association, the Board of Directors shall provide to the shareholders, before holding

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the General Assembly, the operations in which the Chairman or a Board member or a manager may have interests in conflict with Company interests.

During the period from 1st January to end of December, 2023, Company sales to Related Parties amounted to QR 32.04 million, while Company purchases from Related Parties amounted to QR 1.15 million.

1. The Board of Directors has adopted and announced the rules relating to transactions of insiders and to prevent leak of any internal information which were not published to all shareholders, and these rules cover Board of Directors, Senior Executive Management, managers and all employees of the Company, and the families of those persons. The purpose of this is to:
2. 1. Maintain equality between all shareholders in receipt of internal information of the Company.
   2. Raise the transparency and disclosure level and increase the shareholders' trust in the Company.
   3. Avoid any suspicion on insiders benefiting personal gains from use of internal information.

The Policies and Procedures of "Related Party Transactions" and "Insider Trading & Conflict of Interest" have been published on the Company's website.

9. METHOD OF SETTING REMUNERATION OF MEMBERS OF THE BOARD OF DIRECTORS AND SENIOR EXECUTIVE MANAGEMENT:

The remuneration of the members of the Board of Directors shall be set by the shareholders in the Ordinary General Assembly of the Company according to the provisions of Article (37) of the Company's Articles of Association which was amended in the Extraordinary General Assembly meeting held on 27th March, 2019 to be in line with provisions of the Code. The total Board of Directors remuneration shall not be estimated at more than 5% of the net profit of the company after deduction of legal reserves, deductions and allocation of dividends of not less than 5% of the paid-up capital in cash and kind to the shareholders.

The policy of determining remuneration of the Board of Directors and the senior executive management takes into account the responsibilities and scope of the functions of the Board Members and members of Senior Executive Management as well as the performance of the Company. Compensation may include fixed and performance related components and such performance related components may also be related to the long term performance of the Company. The Company's Remuneration Policy was approved and adopted at the Ordinary General Assembly held on February 17, 2010.

In addition, the provisions of Article (35)(1) of the Company's Articles of Association require the Board of Directors to provide to shareholders before holding the General Assembly all the amounts received by the Chairman and members of the Board of Directors of the Company during the fiscal year, including wages, charges, salaries, and consideration for attending Board meetings, and sundry expenses, in addition to amounts received by each of them as a technical or administrative employee or in consideration of any technical or administrative or consultative work rendered to the Company.

An amount of QR7.5 million has been allocated as Directors' remuneration subject to approval by the Ordinary General Assembly of the Company, while an amount of QR12.7 million has been allocated as Executive Committee remuneration during 2023.

10. COMMITTEES OF THE BOARD OF DIRECTORS:

While most of the important affairs are discussed in the meeting of the Board of Directors, the Board of Directors, in accordance with the provisions of Article (18) of the Code, has passed

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resolutions forming a number of committees in accordance with Provisions of the Code and outlining their responsibilities, duties and work provisions and procedures, which committees are assigned with some responsibilities to support the Board of Directors in performing its functions in the best way. The ultimate responsibility, however, remains with the Board of Directors at all times. Committees submit annual reports to the Board of Directors including works rendered and recommendations reached.

These committees are as follows:

1. CORPORATE GOVERNANCE COMMITTEE:

This committee is comprised of the following members:

1. Mr. Keith Higley, Chairman
2. Mr. Abdulla Mohamed Al Kubaisi, Member
3. Mr. Khalid Al Rabban, Member

This committee was referred to in the beginning of this Report in the Preamble. We add here that the committee, periodically and from time to time, performs review of the Company's Corporate Governance system, updates the Board on the developments in this regard and presents recommendations to the Board of Directors.

1. REMUNERATION COMMITTEE:

The Remuneration Committee is formed in accordance with the provisions of Article (18) (Second) of the Code. It consists of the following members:

1. HE Sheikh Suhaim Bin Abdullah Bin Khalifa Al Thani, Chairman
2. Mr. Mohammed Ali Mohammed Khamees Al Kubaisi, Member
3. Mr. Keith John Higley, Member

This committee shall oversee the Remuneration principles and policies of the Company, including remuneration of the Board of Directors and Senior Executive Management, and keep the Board advised accordingly.

The remuneration policies and principles were presented before the shareholders in the General Assembly held on February 17, 2010, and were approved and published in the Company's Annual Report.

The Remuneration Committee held 3 meetings during 2023 on the following dates: 26th February 2023, 19th November, 2023 and 20th December, 2023.

Works of the Committee during the year included review of the annual performance reports on the Senior Executives for the year ended 31st December, 2022.

1. NOMINATION COMMITTEE:

The Nomination Committee is formed in accordance with the provisions of Article (18) (First) of the Code. It consists of the following members:

1. Mr. Mohammed Ali Mohammed Khamees Al Kubaisi, Chairman
2. Mr. Ali Yousuf Kamal, Member
3. Mr. Keith Higley, Member

The Committee, during the year 2023, held 1 meeting on 3rd December, 2023.

The main role of the Nominations Committee is to ensure that nominations and appointments of Board Members shall be made according to formal, rigorous and transparent procedures, and to conduct self-assessment of the Board's performance from time to time.

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The Committee also sets principles for selection and nominations to the Board of Directors in compliance with the provisions of Article 18(First) of the Code.

The Committee prepared an Annual Report on Board performance for the year 2023. It ensured that the Directors were advised to attend Board meetings.

As per Article (18) (first)3, the Committee recommended and advised necessary coordination for development of a succession plan for managing the company to ensure the timely alternatives to fill any vacant positions.

In accordance with Article (18)/7 of the Code, the Nomination Committee submitted a report to the Board including appraisal of the Board performance for the year 2023.

The Nomination Committee had circulated a questionnaire headed "Board Effectiveness Review" to the Directors in which they were requested to consider various areas such as corporate strategy, Board meetings, risk management, succession & development, Board composition and training, and Board effectiveness.

We can certainly confirm that the report concluded that the Board effectiveness was positive as the Board structure fully complies with the Code and applicable laws regarding composition of the Board. The attendance level at Board meetings in 2023 including representation and proxies reported average 100% throughout the year. Chairpersons and members of Board committees also performed well with respect to attendance of Committees' meetings and delivering their tasks and duties. Board agenda are appropriate and circulated on timely basis. Presentations by the Management are professional and succinct. Directors are also granted the right balance of support and challenge to management. Every director has a voice at the meetings and the right level of discussion takes place on key issues and potential investment decisions. In a nutshell, the Annual Report prepared by the Nomination Committee expressed satisfaction with regard to compliance of the Board members in achieving the company's interests, doing the Committees' works, and their attending of the Board and Committees' meetings.

1. AUDIT COMMITTEE:

The formation of the Audit Committee is in compliance with the Article 18 of the Code and includes the following members:

1. HE Sheikh Khalifa Bin Abdulla Al Thani, Chairman
2. Mr. Abdulla Mohamed Al Kubaisi, Member
3. Mr. Mohamed Yousuf Kamal, Member

The Committee meets at least every three months and keeps minutes of its meetings. The Audit Committee held six meetings during 2023 on the following dates: 23rd February, 2023, 30th April, 2023, 19th June, 2023, 13th August, 2023, 25th October, 2023, and 20th December, 2023.

The Committee during the year reviewed adequacy of the system of Internal Controls and Risk Management System, periodic audits performed and work done by the Internal Audit Activity. It also reviewed the contract and nominations of external auditors besides review of dealings with the related parties and relevant controls. The Committee further reviewed the accuracy and validity of financial statements, related notes and disclosures, the External Auditor's report and financial and accounting policies.

Major recommendations of the Committee included the following:

1. Based on the review of offers and credentials, PricewaterhouseCoopers Qatar (PWC) were recommended to be the external auditors for 2023.

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