Corporate Governance

Item 1: The company is required to define in detail the tasks, responsibilities and duties of each member of the Board of Directors and Executive Management, as well as powers authorized for the Executive Management

• The tasks and responsibilities of the Board of Directors and Executive Management are clearly defined in the policies and regulations approved by the Board of Directors.
• The Board of Directors’ responsibilities are clearly defined in the company’s statute.
• No party in the company shall take absolute responsibility for powers, and the board shall not make random authorizations without time limits.
• The Board of Directors assumes its tasks and responsibilities in accordance with the companies’ governance regulations.
• The Chairman of the Board of Directors assumes his tasks and responsibilities in accordance with the companies’ governance regulations.
• The Executive Management assumes its tasks and responsibilities in accordance with the companies’ governance regulations.

Item 2: The Board of Directors’ achievements this year

• The Board of Directors enhanced the company’s real estate investments, by carrying out maintenance and repair works.
• Due to the instability in real estate prices, and based on a study on Kuwait’s real estate market, it was noticed that prices have dropped. Based on that, the Board of Directors decided there are no current projects until real estate prices in Kuwait stabilize.

Item 3: About the Board of Directors’ formation of specialized committees

Committees’ names and dates of formation 

• The auditing committee is as follows:
• Mohammad Taha Abdul Sameea           Chairman
• Mohamed Sayed Sabet Abdelwahab Member
• Mahmoud Hosny Abdelrazek Hussein Member
• Muhammad Shareef Puthiyottil Thazha Internal auditor

 Auditing committee’s tasks

• Verifying the validity and reliability of the related financial and non-financial data by auditing financial data.
• Verifying commitment to the applicable laws and regulations.
• Preparing detailed periodical reports with the auditing results.

Auditing committee’s achievements

The auditing committee reviewed the related financial and administrative data in 2021 in accordance with international accounting standards. It prepared periodic reports and presented them to the board of directors.

The auditing committee was formed on 14/03/2016 for a one-year term. It was formed again on 07/03/2017 for a one-year term. It was formed again on 13/03/2018 for a one-year term. It was formed again on 19/03/2019 for a one-year term. It was formed again on 20/03/2020 for a one-year term. It was formed again on 02/03/2021 for a one-year term.

Number of meetings: 4 meetings in 2021

• The risks committee is as follows:

1- Mr. Mohammad Taha Abdul Sameea                                   Chairman

2- Mr. Mohamed Sayed Sabet Abdelwahab                         Member

3- Mr. Mahmoud Hosny Abdelrazek Hussein             Member

Risks committee’s tasks

• Assessing risks to identify the effects of each risk and the probability of its recurrence.
• Regular monitoring to detect any new risk sources or failures in managing previous risks.
• Preparing detailed periodic reports of the risks that occurred, with recommendations on how to solve them.

Risks committee’s achievements

• The risks committee studied the regulatory requirements. As a real estates company, due to the instability in real estate prices, and based on a study on Kuwait’s real estate market, it was noticed that prices have dropped. Based on that, the Board of Directors decided there are no current projects until real estate prices in Kuwait stabilize.

The risk management followed up with the performance of each department separately, and presented its reports to the Board of Directors.

The risks committee was formed on 14/03/2016 for a one-year term. It was formed again on 07/03/2017 for a one-year term. It was formed again on 13/03/2018 for a one-year term. It was formed again on 09/03/2019 for a one-year term. It was formed again on 10/03/2020 for a one-year term. It was formed again on 02/03/2021 for a one-year term.

Number of meetings: 4 meetings in 2021.

• The nominations and bonuses committee is as follows:

1- Mr. Mohammad Taha Abdul Sameea                                   Chairman

2- Mr. Mohamed Sayed Sabet Abdelwahab                         Member

3- Mr. Mahmoud Hosny Abdelrazek Hussein                      Member

4- Mr. Hussam Abdulraheem Ahmad                                       Member

Nomination and bonuses committee’s tasks

• Recommending nomination or renomination of Board of Directors and Executive Management members.
• Placing a clear policy for the Board of Directors and Executive Management members’ bonuses.
• Receiving requests to join executive posts as needed.
• Preparing a detailed annual report on all bonuses given to Board of Directors and Executive Management members, including cash or benefits.

Nomination and bonuses committee’s achievements

The nominations and bonuses committee held one meeting, during which it recommended no bonuses to members of the Board of Directors and Executive Management

The risks committee was formed on 12/05/2016 for a one-year term. It was formed again on 11/05/2017 for a one-year term. It was formed again on 13/05/2018 for a one-year term. It was formed again on 05/05/2019 for a one-year term. It was formed again on 06/05/2020 for a one-year term. It was formed again on 18/05/2021 for a one-year term.

Number of meetings: One meeting in 2021.

 Item 4: A mechanism was placed to allow the Board of Directors to access information and data precisely and on time

• The company has an effective mechanism that allows members of the Board of Directors in general, and nonexecutive and independent members of the Board of Directors in particular, to access all main information and data through which they can assume their duties.

• About the application of requirements of forming the nominations and bonuses committee
• A Board of Directors’ subcommittee was formed to handle duties of making nominations and bonuses. The Board set the committee membership terms and style of work.
• The nominations and bonuses committee has 4 members.
• A nonexecutive Board member chairs the nominations and bonuses committee.
• One member of the nominations and bonuses committee is an independent member of the Board of Directors.
• The nominations and bonuses committee assumes the required tasks and responsibilities in accordance with the companies’ governance rules.
• The nominations and bonuses committee held one meeting in 2021, and it was written in the meeting’s minutes.
• The Board of Directors, Executive Management and Managers Bonuses Report

• The Board of Directors decided, based on the nominations and bonuses committee’s recommendation, to not pay any bonuses to members of the Board of Directors and Executive Management. This was approved in the General Assembly held on 04/04/2021.

Item 1: Summery of the bonuses and incentives’ policy followed by the company, related in particular to members of the Board of Directors, Executive Management and Managers.

• The Board of Directors approved the nominations and bonuses committee’s recommendation to not pay any bonuses to members of the Board of Directors, Executive Management and Managers.

Item 2: Including the following two statements:

• The details of the bonuses and benefits’ types and categories are just an example

• The details of the bonuses and benefits’ types and categories are just an example

Item 3: Fundamental deviations from the bonuses’ policy adopted by the Board of Directors

There were no deviations from the bonuses’ policy. The Board of Directors’ decision not to issue any bonuses was adopted and approved in the General Assembly held on 04/04/2021.

Item 1 The Board of Directors and Executive Management must present written pledges of the authenticity and integrity of financial reports prepared by the company

• The Executive Management must present a written pledge to the company’s Board of Directors confirming that the company’s financial reports are displayed in a proper and just way, highlighting all of the company’s financial aspects including operational data and result, prepared according to international accounting standards.
• The annual report that the company’s Board of Directors sends to shareholders must contain a pledge of the authenticity and integrity of all financial data and reports related to the company’s activity.

Item 2 The Board of Directors must form an auditing committee whose main role is to make sure of the authenticity and integrity of financial reports and internal control systems

• A Board of Directors’ auditing subcommittee was formed. The Board set the committee membership terms and style of work.
• The auditing committee has 4 members.
• One member of the auditing committee is an independent member of the Board of Directors.
• No CEO or executive Board member shall be a member of the auditing committee.
• Members of the auditing committee have the academic qualification and practical experience in accounting and financial fields.
• The auditing committee assumes the required tasks and responsibilities in accordance with the companies’ governance rules.
• The auditing held four regular meetings throughout the year; one meeting each quarter, and the meetings’ minutes were written.
• The auditing committee holds periodic meetings with external auditors.
• The auditing committee holds at least four meetings a year with the internal auditor.

Item 3 The auditing committee’s recommendations are in line with the Board of Directors’ decisions.

Item 4 The external auditor’s impartiality and independence from the company and its Board of Directors must be confirmed.

• An external auditor was hired for the company and its Board of Directors in accordance with the companies’ governance regulations.

Item 1 The company is required to have an independent department/office/unit for risk management that identifies, measures and follows up with risks facing it

• The company is required to have an independent department/office/unit for risk management that identifies, measures, follows up with and controls risks facing it.
• The risk department/office/unit sets active risk management systems and measures. It reviews deals in accordance with companies’ governance regulations.
• The risk department/office/unit contains qualified human resources with professional and technical capabilities.
• Those in charge of the risk management department enjoy independent status by virtue of falling directly under the risks committee, in addition to enjoying large authorities without any financial powers or authorities.

Item 2 The Board of Directors must form a committee that handles risk management, and whose main role is to put policies and regulations for risk management in accordance with the company’s tendency to take risks.

• A Board of Directors’ risk management subcommittee was formed. The Board sets the committee membership terms and style of work.
• The risk management committee has 3 members.
• The risk management committee’s chief is a nonexecutive Board member. The CEO is not allowed to be a member of the committee.
• The risk management committee assumes the required tasks and responsibilities in accordance with the companies’ governance rules.
• The risk management committee held four meetings throughout the year, and the meetings’ minutes were recorded.

Item 3 The company is required to ensure the adequacy of its internal control systems

• The company has internal control systems that cover all its activities.
• The company’s organizational structure reflects the ‘Four Eyes Principles’ for internal control.
• The company established an internal auditing department/office/unit with complete technical independence, which follows the auditing committee and Board of Directors.
• The Board of Directors appointed the internal auditing department/office/unit director based on the auditing committee’s recommendation.
• The Board of Directors’ auditing subcommittee sets the tasks and responsibilities of the internal auditing department/office/unit.
• The internal auditing department/office/unit prepares a report that includes a review and evaluation of the internal control systems applied in the company according to the companies’ governance regulations.
• An independent auditing office was assigned to evaluate and review the company’s internal control systems, prepare an Internal Control Report and inform the authority of it annually.
• Another auditing office reviews and evaluations the internal auditing department/office/unit performance regularly every three years. A copy of the report is given to the internal auditing committee and the Board of Directors.

Item 4 The company has an independent internal auditing department unit selected according to academic qualifications and experience in internal auditing and review. The department presents periodic auditing reports. The auditing committee, Board of Directors and Higher Management are informed of the internal auditing tasks.

The internal auditing general manager refers a report to the auditing committee.

Item 1 The company is required to put an action charter for the terms and criteria of professional conduct and ethical values.

• An action charter was created in the company, containing the terms and criteria mentioned in companies’ governance regulations.

Item 2 The company is required to put policies and mechanisms to limit cases conflict of interest and ways of handling them.

• The Board of Directors has a policy regarding conflict of interest as mentioned in the companies’ governance regulations.
• The Chairman of the Board of Directors informs the General Assembly about the business and contracts in which a Board of Directors’ member has a personal interest, supported by a report from the auditor.

Item 1 The Board of Directors must put clear mechanisms for accurate and transparent presentation and disclosure.

• The Board of Directors puts mechanisms of presentation and disclosure according to the companies’ governance regulations.

Item 2 The company prepares a disclosure report for members of the Board of Directors and Executive Management required by supervisory authorities, which are updated regularly.

The Board is ultimately responsible for guaranteeing the accuracy and integrity of the information exposed by controls and mechanisms necessary to execute proper policies and disclosure procedures.

Item 3 A unit to organize investors’ affairs is established to serve investors.

Item 4 The Board of Directors develops the information technology infrastructure. Information is updated regularly on the company’s website:  (http://www.dalqanrealestate.com)

Item 1 The company identifies and protects shareholders’ general rights in order to ensure justice and equality among all shareholders regardless of their status.

• The company’s statute and internal regulations include the measures and controls necessary for all shareholders to practice their rights without discrimination, in accordance with the companies’ governance regulations.

Item 2 The company must always accurately follow up with shareholders’ data.

• The company has a special register kept with the Kuwait Clearing Company, containing shareholders’ names, nationalities, countries of residence and shares they own.
• The company allows shareholders to access shareholders’ registers. The data included in those registered are handled with top secrecy, as long as it does not contradict with the authority’s law, executive regulations and the instructions and controls issued by it.

Item 3 The company must encourage shareholders to participate and vote in the company’s General Assembly meetings.

• General Assembly meetings for shareholders were organized according to the companies’ governance regulations and related laws, regulations and instructions.
• The General Assembly’s agenda contain the minimum number of items required in accordance with the companies’ governance regulations.
• The company allows all shareholders to practice their voting rights without any obstructions.

Item 1 The company puts the systems and policies that guarantees protection of stakeholders’ rights.

• The company has a policy that includes the rules and procedures that guarantee protection and recognition of stakeholders’ rights, and entitles them to compensations in case any of their rights were violated in accordance with the companies’ governance regulations.
• A stakeholder is not entitled to any privileges through dealing with contracts and deals that are part of the company’s regular activities.
• The company has internal policies and regulations that include a clear mechanism to award various contracts and deals, either through tenders or purchase orders. The mechanism is fully disclosed.

Item 2 The company must encourage stakeholders to follow up with the company’s various activities.

• The company has mechanisms that guarantee maximum benefit from shareholders’ contributions towards the company, and encourages them to follow up with its activities in parallel with efforts to fully realize its interests according to the companies’ governance regulations.

Item 1 The company puts mechanisms that give members of the Board of Directors and Executive Management access to training programs and courses regularly.

• The company has mechanisms that allow taking care of training aspects for members of the Board of Directors and Executive Management in accordance with the companies’ governance regulations.

Item 2 The company puts systems and mechanisms to evaluate the performance of each member of the Board of Directors and the Executive Management.

• The company has systems and mechanisms to evaluate the performance of each member of the Board of Directors and Executive Management regularly.
• The company has Key Performance Indicators (KPI’s) to evaluate the board of directors and executive management annually in accordance with the companies’ governance regulations.

Item 3 The company must constantly emphasize the importance of Value Creation among employees, and that through constant work on achieving the company’s strategic goals, enhancing performance and committing to regulations and instructions, especially governance rules.

• The company has an Integrated Reports system that helps achieve its strategic goals and create corporate values in accordance with the companies’ governance regulations.

Item 1 The company seeks to put a policy that guarantees the right of achieving balance between its goals and the society’s goals.

• The company includes a policy that achieves balance between its goals and the goals that the society seeks to achieve, and helps improve the living, social and economic conditions of the societies where it operates, in accordance with the companies’ governance regulations.

Item 2 The company participates in social work programs. It takes part in various exhibitions with the lowest prices, participates in various promotions, carries out its own promotions and offers gifts on holidays and national occasions.