Egyptian Financial Supervisory Authority

April 27, 2016

Circular No. (1) of 2016

Regarding Recent Amendments to the Listing and Delisting Rules of Securities on the Egyptian Exchange

In reference to the Listing and Delisting Rules of Securities on the Egyptian Exchange issued under the Board of Directors' Decision No. (11) of 2014 and its subsequent amendments, and with the aim of clarifying several aspects related thereto, as well as the commencement of the amended Egyptian Accounting Standards issued by Minister of Investment Decision No. (110) of 2015, the Authority confirms the necessity to observe the following:

First: Formation of the Board of Directors and Member Qualifications:

Listed companies must comply with Article (30) of the Listing Rules by specifying the status of each board member – whether a shareholder (in their own capacity or representing a legal entity) or an expert, as well as indicating whether they are independent or not according to the definition in Article (4) of the same Rules.

Second: Board of Directors' Report Prepared for Presentation to the Company's General Assembly:

Pursuant to Article (40) of the Listing Rules, the company must, in preparing its Board of Directors' report for presentation to the General Assembly, include the data set forth in Annex No. 1 attached to the Executive Regulations of Law No. 159 of 1981 and listed below, in addition to the data specified in paragraphs (a) to (e) of the aforementioned article and what the Exchange requires in the designated form.

Accordingly, the report must include the following:

• The company's overall status, business results, and business outlook.
• The company's and its subsidiaries' main activities and any changes in ownership of those companies during the fiscal year.
• Proposed dividends to be distributed to shareholders and proposals regarding transfers to reserves.
• The number of Board of Directors meetings.
• The number of Audit Committee meetings and evidence of the presentation of its reports to the company's Board of Directors.
• The average number of employees during the year and the average employee income during the same period.
• If the company applies an employee and executive incentive system through share allocation: the total number of shares outstanding under this system, the total granted during the year, the number of beneficiaries, the total shares granted since the system's inception, the total number of beneficiaries, and the names and statuses of each individual who received 5% or more of the total shares outstanding (or 1% of the company's capital) under the system applied by the company.
• Any measures taken against the company, its board members, or its managers by the Authority or the Exchange regarding violations of the Capital Market Law, fraud, and listing rules.
• All contracts for consideration concluded by the company with any of its founders, major shareholders, or their affiliated groups during the previous year, including the value, terms, details of each contract, and the date of prior General Assembly approval for each of these contracts.

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Egyptian Financial Supervisory Authority

Third: Controls on Disposing of More Than 50% of the Company's Assets:

The controls referred to in Article (43) of the Listing Rules shall apply to transactions occurring on the day following its issuance date (March 24, 2016), unless a contract regarding them was concluded and approved by the company's competent authority prior to this date.

For application purposes, fixed assets shall be calculated at net value after deducting depreciation or any related provisions. Regarding "other assets not related to the company's core business activities," this includes securities portfolios and investments in other companies, excluding companies whose purpose is to participate in founding companies that issue securities or in increasing their capital.

Fourth: Treasury Shares Owned by a Subsidiary in the Listed Company's Shares:

Pursuant to Article (1) bis of the Listing Rules, if a company purchases shares through a subsidiary or an entity under its actual control, the purchased shares are considered treasury shares and are subject to all provisions governing treasury shares. Listed companies that purchase treasury shares must dispose of them to third parties within a maximum of one year from the date of acquisition. For this purpose, disposing of these shares to a subsidiary or an entity under its actual control, as defined in the Article, does not constitute a disposal to a third party. If more than one year passes on such shares, they must be transferred to the parent/holding company and procedures for capital reduction and cancellation of those shares must be initiated.

Fifth: Deadline Granted to Companies to Align with the Authority and Exchange Regarding First Quarter Financial Statements:

In light of Minister of Investment Decision No. 11 of 2015 issuing the amended Egyptian Accounting Standards for the first time since the standards issued in Egypt in 2006, which incorporate numerous changes corresponding to updates in international standards. The Minister of Investment Decision stipulated that these standards shall take effect from January 1, 2016, and apply to entities whose fiscal year begins on or after this date, meaning their application shall commence for the first quarter (ending March 31, 2016) for companies whose fiscal year begins on January 1, and for the first quarter (ending September 30, 2016) for companies whose fiscal year begins on July 1.

Given that auditors require additional time to prepare and review financial statements in the first quarterly financial statements following implementation to further ensure compliance with the updated standards, the Authority's Board of Directors, in its session dated April 4, 2016, and pursuant to Article (46) of the Listing Rules, exceptionally for this year only, approved extending the deadline for submitting first quarter financial statements for companies whose fiscal year begins on January 1 to May 31, 2016, and extending the deadline for submitting first quarter financial statements for companies whose fiscal year begins on July 1 to November 30, 2016, with the same rule applying to any companies whose fiscal year start date differs from the aforementioned dates.

The Egyptian Exchange is instructed to implement and publish the contents of this Circular on trading screens and its website.

Central Administration Chairman of the Authority Hossam Abdel Rahim

47076

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Egyptian Financial Supervisory Authority Office of the Chairman

20 Emad El-Din St. - Cairo - Egypt
Tel: (02-2) 27727123
Fax: (02-2) 25741000

P.O. Box: 618 - Postal Code: 11111
Email: info@efsa.gov.eg
Website: www.efsa.gov.eg

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Egyptian Financial Supervisory Authority Office of the Chairman

20 Emad El-Din St. - Cairo
28 Talaat Harb St. - Cairo
1 Masterland Towers - El Baher Al Azeem St. - Giza
Smart Village - Building 15 - Giza

P.O. Box: 25450
Tel: 25748807
Fax: 25745598

P.O. Box: 12577
Tel: 25727142
Fax: 25727119

P.O. Box: 12577
Tel: 25727142
Fax: 257270041