Chairman of the Board

Board of Directors Decision

No. (121) of 2010

Regarding the Basic Standards of Professional Performance for Companies Operating in the Field of Providing Financial Advice in Securities

The Board of Directors of the Egyptian Financial Supervisory Authority

Having reviewed the Capital Market Law issued under Law No. 95 of 1992 and its Executive Regulations, and the Law Regulating Supervision on Non-Banking Financial Markets and Instruments issued under Law No. 10 of 2009, and the Decision of the Chairman of the Capital Market Authority issued under Decision No. 41 of 2007 dated 20/3/2007 regarding the conditions for registration in the Authority's Advisors Register, and the memo presented to the Board of Directors at its meeting held on 18/10/2010,

Decided:

(1) Article
Entities and companies engaged in financial advisory activities and registered in the Authority's Financial Advisors Register, or those seeking registration, are required to apply the Basic Standards of Professional Performance attached to this Decision.

(2) Article
Entities and companies seeking registration as well as those registered in the Authority's Financial Advisors Register are required to submit evidence of compliance with the aforementioned standards in Article (1) to the Authority when submitting the registration request or within six months from the day following the publication of this Decision.

(3) Article
This Decision shall be effective from the day following its publication on the Authority's website, and the relevant sectors and departments are tasked with its implementation according to their respective jurisdictions.

Dr. Ziad Bassam El-Din
Chairman of the Authority

46076

---

Egyptian Financial Supervisory Authority (EFSA)

Cairo, Dokki, Building 15 - 84 B
Km 28, Cairo/Alexandria Desert Road
6th of October Governorate, Postal Code: 12577

Fax: +202 2524 5222
Phone: +202 2527 0040
Email: info@efsa.gov.eg
Website: www.efsa.gov.eg

---

Basic Standards of Professional Performance for Companies Operating

in the Field of Providing Financial Advice in Securities

Note: The following standards refer to companies operating in the field of providing financial advice as "the Company" and their employees as "Analysts".

First: Standards Specific to the Company

Standards Specific to the Company's Integrity and Honesty

(1) Article
No entity or company is permitted to engage in financial advisory activities in securities without obtaining prior approval from the Authority.

(2) Article
The Company is required to prepare a general manual of procedures it follows when providing financial advice, ratings, and research, as well as a code of professional ethics and internal work controls.

(3) Article
The Company must deal with its clients based on principles of honesty and safeguarding their interests, treating clients with similar circumstances equally, and avoiding providing benefits, incentives, or special information to some clients over others, whether directly or indirectly. It is also prohibited from undertaking any action that could harm any of them.

(4) Article
The Company is required to establish an internal control system to prevent Analysts from conducting evaluations or ratings whose results are misleading or incorrect.

Standards Specific to Independence and Avoidance of Conflicts of Interest

(5) Article
The Company is required to ensure the availability of independence conditions, including the absence of a shared or conflicting interest with the requesting party, the evaluated company, or any associated parties, in cases where the engagement is based on acting as an independent financial advisor.

---

Egyptian Financial Supervisory Authority (EFSA)

Cairo, Dokki, Building 15 - 84 B
Km 28, Cairo/Alexandria Desert Road
6th of October Governorate, Postal Code: 12577

Fax: +202 2524 5222
Phone: +202 2527 0040
Email: info@efsa.gov.eg
Website: www.efsa.gov.eg

---

(6) Article
The Company is required to promptly disclose to the Authority any suspected conflict of interest between the Company and the evaluated company or any associated parties.

(7) Article
The Company, its Analysts, and any other associated parties are prohibited from providing financial, legal, accounting, or technical advice related to the evaluated company or associated parties during the six months preceding the contract date as an independent financial advisor. In the case of takeover bids, this obligation extends to not providing financial advice to any bidder or the target company for six months from the expiration of unsuccessful bids, and three months from the expiration of successful bids. The Company must also ensure no shared or conflicting interest with parties associated with transactions for which the Company's services were requested to complete, in cases where the Company acts as an independent financial advisor; otherwise, immediate disclosure to the Authority regarding the nature of the association is required.

(8) Article
The Company, any of its Directors or Analysts, or any associated parties are prohibited from trading in the securities under evaluation based on undisclosed or non-public information, even if incomplete during the evaluation period, whether related to an imminent transaction or any other matter having a material impact on the trading prices of these securities or the financial positions of the issuing entities.

(9) Article
The Company is considered an associated financial advisor to the requesting entity from the moment it is commissioned to prepare the evaluation on behalf of that entity. It is also considered aware of the transactions subject to evaluation and associated with all parties involved in those transactions.

(10) Article
When conducting its activities, the Company must work to avoid the emergence of any conflict of interest.

---

Egyptian Financial Supervisory Authority (EFSA)

Cairo, Dokki, Building 15 - 84 B
Km 28, Cairo/Alexandria Desert Road
6th of October Governorate, Postal Code: 12577

Fax: +202 2524 5222
Phone: +202 2527 0040
Email: info@efsa.gov.eg
Website: www.efsa.gov.eg

---

Standards Specific to Analysts

(11) Article
The Company is required to appoint Analysts who possess sufficient expertise and study in the fields of valuation and analysis of securities to determine fair value.

(12) Article
The Company is prohibited from linking Analysts' salaries and bonuses to any gains or losses incurred by related parties as a result of reports issued by these Analysts.

(13) Article
The Company is prohibited from linking Analysts' salaries and bonuses to the results of the reports and studies they issue.

(14) Article
The Company is required to maintain the confidentiality of reports and use them only for their intended purpose, while ensuring the confidentiality of its employed Analysts and not presenting the results of their studies to any associated parties engaged in advisory services.

(15) Article
The Company is required to provide its Analysts with a continuing professional development program that addresses their needs and job requirements according to the latest developments in their field of work.

Second: Standards Specific to Financial Advice and Valuation Operations

(16) Article
The Company must ensure the availability of correct and sufficient sources, information, and data to issue financial advisory reports and verify the adequacy of the number of qualified Analysts to prepare such reports. In cases where the evaluation relies on limited historical data in some aspects, the Company must clearly indicate in a prominent place in the issued reports the limitations of estimation and analysis in this regard. The Company must in all cases conduct inquiries and discussions to ensure there is no reason to believe that the data or information used is incorrect. In the event of obtaining data or information from the client, a letter from the evaluated client confirming the integrity of such data and information and their source is required regarding the credibility of the estimation.

(17) Article
The Company is required to follow an organized methodology for research, analysis, and evaluation according to internationally recognized methods and tools in this field.

---

Egyptian Financial Supervisory Authority (EFSA)

Cairo, Dokki, Building 15 - 84 B
Km 28, Cairo/Alexandria Desert Road
6th of October Governorate, Postal Code: 12577

Fax: +202 2524 5222
Phone: +202 2527 0040
Email: info@efsa.gov.eg
Website: www.efsa.gov.eg

---

(18) Article
Without prejudice to the provisions of the Capital Market Law issued under Law No. 95 of 1992 and its Executive Regulations, the Company is required to retain the records and documents used in preparing evaluations for a period of no less than five years from the date of submitting its reports to the requesting entities.

(19) Article
The Company is required to document the methodologies used in analysis, evaluation, and study and retain them for a period of no less than five years from the date of submitting reports to the requesting entities.

(20) Article
The Company must ensure the standardization of data and information sources in similar studies. It is required to disclose the reason for changing such sources in the latest report following the change. The Company is also prohibited from switching between data sources and valuation methods to achieve a specific result in the "study subject to the report".

(21) Article
The Company is required to disclose the adequacy and reliability of the data and information used in the evaluation and on which the report was prepared, along with whether due care was exercised to confirm the absence of other data or information besides those on which the report was based.

(22) Article
The Company is required to disclose any suspicions or doubts it has regarding the information used in preparing its report, clearly indicating this in a prominent place in the report.

(23) Article
The Company must establish a rigorous system for reviewing its valuation methods and models in general, and any significant changes to those methods and models. This must be conducted completely independently of the financial advisory services the Company provides to its clients.

Third: Standards Specific to Reports Submitted by the Company

(24) Article
The Company must establish procedures to prevent the issuance of any analysis or report for the requesting Authority that contains any misleading or incorrect information regarding the fair value of the evaluated company or any related financial data.

(25) Article
The Company is required to disclose the following information in a prominent place in the report:

1. The reason for preparing the report and the extent of the Analysts' responsibility and reliance on the information used in it.
2. The sources of data and information used in preparing the report, including estimates and future forecasts.

---

Egyptian Financial Supervisory Authority (EFSA)

Cairo, Dokki, Building 15 - 84 B
Km 28, Cairo/Alexandria Desert Road
6th of October Governorate, Postal Code: 12577

Fax: +202 2524 5222
Phone: +202 2527 0040
Email: info@efsa.gov.eg
Website: www.efsa.gov.eg

---

3. The assumptions on which all estimates, analyses, and forecasts reached by the Company in the reports are based.
4. Confirmation of whether the assumptions underlying the estimates, analyses, and forecasts constitute a reasonable basis for estimation, analysis, and forecasting.
5. The Company's opinion on whether the estimates, analyses, and future forecasts reached are appropriate based on the assumptions used in the study.

Fourth: Standards Specific to Disclosure and Confidentiality of Information

(26) Article
Without prejudice to legally required disclosure rules, the Company and all its insiders are required not to disclose any confidential information related to the reports they prepare. The Company and Analysts must exercise due care in maintaining confidential information, including price forecasts and estimates, and take necessary measures to prevent the leakage of any information that could impact the trading or prices of securities of the parties concerned by the report.

(27) Article
The Company is required to disclose to the Authority:

1. The nature of existing or potential conflicts of interest between the Company and any parties operating in the securities market before conducting the evaluation and preparing the report.
2. The percentage of fees collected from the requesting entity and its associated parties relative to the Company's total annual income.
3. Any relationship linking the Company to companies operating in the securities field in the Egyptian market.
   Such disclosures must be made before commencing activities and immediately upon any change in the disclosed information.

(28) Article
The Company is required to acknowledge the following before commencing activities:

• The accuracy of reports issued by the Company or any of its employees.
• Notifying the Authority immediately of any changes to the information contained in the registration request and attached acknowledgments.

---

Egyptian Financial Supervisory Authority (EFSA)

Cairo, Dokki, Building 15 - 84 B
Km 28, Cairo/Alexandria Desert Road
6th of October Governorate, Postal Code: 12577

Fax: +202 2524 5222
Phone: +202 2527 0040
Email: info@efsa.gov.eg
Website: www.efsa.gov.eg