National Marine Dredging : Corporate Governance Report

Corporate Governance Report

2021

Corporate Governance Report 2021

Contents

1.	INTRODUCTION	5
2.	CORPORATE GOVERNANCE PRACTICES	6
2.1. Corporate Governance Rules	6
2.2. Corporate Governance Structure	7
2.3. Disclosure Practices	7
2.4. Delegation of Authority	8
2.5. Code of Business Conduct and Fraud Control Policy	8
2.6. Director's Induction Policy	9
2.7. Share Dealing Policy	9
2.8. Follow-up & Supervision Committee	9
2.9. Transactions in Company's Securities by Board Members	10
3.	BOARD OF DIRECTORS	11
3.1. Role of the Board	11
3.2. Composition of the Board	12
3.3. Representation of Female Members in the Board of Directors	13
3.4. Director's Qualification and Experience	14
3.5. Directors Remunerations	14
3.6. Board of Directors Meeting	15
3.7. Board Secretary	16
3.8. Duties and Competencies of the Board performed by Executive Management	16
3.9. Dealing with Other Related Parties	17
3.10. Executive Management	18
4.	EXTERNAL AUDITOR	20
4.1. Appointment of External Auditors	20

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Corporate Governance Report 2021

4.2. External Auditors Independence	20
4.3. External Auditors Fees	20
4.4. Services received from other External Audit Firms	21
4.5. Qualification of External Auditors	21
5.	BOARD COMMITTEES	22
5.1. Audit Committee	22
5.2. Nomination & Remuneration Committee	24
5.3. Strategy Committee	24
6.	INTERNAL CONTROL SYSTEM	26
6.1. System of Internal Control at NMDC	26
6.2. Independent Assessment of Internal Control System	26
6.3. Risk Management	28
6.4. Ethics and Compliance	28
6.5. Quality, Health, Safety and Environment	28
7.	COMPANY'S CONTRIBUTION	30
7.1. Corporate Social Responsibility Initiatives	30
7.2. Contribution to Local Community Development	30
7.3. Contribution to Environment Protection	31
8.	GENERAL INFORMATION	32
8.1. Monthly Price of the Company's share as compared to General and Sector Index	32
8.2. Chart of the comparative performance of the Company share with General Index and
	Company's Sector Index	32
8.3. Breakdown of Ownership of NMDC Shares by Nationality and by Category as at 31
	December 2021	33

8.4. Statement of the Company's Shareholders who own 5% or more of the Company's

Capital as at 31 December 2021	33
8.5. Breakdown of Ownership of Company Shareholders as at 31 December 2021	33

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Corporate Governance Report 2021

8.6. Statement of significant events encountered by the Company during 2021	33
8.7. Investor Relation Officer	34
8.8. Emiratization in 2021	34
8.9. Innovative projects and initiatives in 2021	34
8.10. Details of violations during 2021	34

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Corporate Governance Report 2021

1. INTRODUCTION

National Marine Dredging Company Group (hereafter referred as "NMDC" or the "Company" or the "Group) is operating in an evolving global environment of diverse expectations, constant regulatory change, and increasing focus on stakeholder engagement and accountability. We acknowledge that the environment in which we operate provides challenges from a governance and regulatory perspective; however, we are confident that our commitment to adopting and complying with good corporate governance practices, and our culture and values will continue, as ever, to provide the group with a strong foundation that will enable the Board of Directors and the Company to meet these challenges going forward.

The purpose of this document is to report on the corporate governance framework at NMDC Group, in accordance with Resolution No. 3 of 2020 concerning Approval of Joint Stock Companies Governance Guide (hereafter referred as "Corporate Governance Guide") issued by the Securities and Commodities Authority (hereafter referred as "SCA") and as amended from time to time.

This report includes a discussion on the following:

1. Corporate Governance Practices - the principles of the Company's corporate governance framework and the approach the Company takes to the implementation of these principles;
2. Board of Directors (the Board) - the role of the Board in connection with the Company's corporate governance framework, the structure and composition of the Board, the terms of membership of the Directors including membership in other joint stock companies and details about their remuneration from the company;
3. Directors' Dealings in NMDC Group Securities - a description of the Company's share dealing policy, and the company's approach to ensuring that it complies with its disclosure obligations relating to Directors' dealings in NMDC Group securities;
4. External Auditors - a brief about the Auditor company, including a statement of the fees and expenses relating to auditing or other services provided by the Company's External Auditor, and their qualified opinion on the interim and annual financial statements;
5. Board Committees - a description of the composition, functions and responsibilities of the three Board Committees - Audit Committee, Nomination and Remuneration Committee, and Strategy Committee;
6. Internal Control System - a description of the Company's internal control system, and the Company's approach to comply with that system;
7. Company's Contribution - in development of local community and environment protection during the year 2021; and
8. General Information - other information requested by SCA, including price movement of Company's shares, breakdown of share ownership, statement of significant events encountered by the Company, innovative projects and initiatives, Emiratization percentage, investor relations and any corporate governance violations committed during 2021.

This Corporate Governance Report provides information pertaining to NMDC Group post-merger with National Petroleum Construction Company (NPCC). The information relating to previous years considers only NMDC details as NPCC was previously not listed in the stock market.

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