Charter

1. General provisions

1.1. Azerbaijan Investment Holding (hereinafter the “AIH”) is a public legal entity operating in the area of managing state-owned enterprises and entities well as business units with partial state ownership (hereinafter state-entities), given under its governance on the basis of common principles, improving performance, as well as increasing transparency and economic efficiency of their investment programs, assuring their competitiveness and improving their financial health and standing (hereinafter referred to as the relevant field).

1.2. AIH is guided by the Constitution of the Republic of Azerbaijan, international treaties to which the Republic of Azerbaijan is a party, laws of the Republic of Azerbaijan, this Charter, other Decrees and Orders of the President of the Republic of Azerbaijan, as well as decisions and orders of the Cabinet of Ministers of the Republic of Azerbaijan and normative legal acts.

1.3. AIH cooperates with the state and local self-governing authorities, international and non-governmental organizations and other legal entities and individuals with the purpose of implementation of its objectives and obligations.

1.4. AIH shall be engaged in activities of national and/or public importance. AIH may be engaged in entrepreneurship activities in order to achieve the goals set forth in this Chapter.

1.5. AIH shall have an independent balance, property in use, treasury and bank accounts, a seal with an engraved its own name, appropriate stamps and letterheads, a logo.

1.6.  AIH shall have a right and responsibilities, to enter into transactions, acquire and execute property and non-property rights on its own behalf. It may act as a plaintiff or defendant in a court proceeding.

1.7. Official name of AIH is as follows:

1.7.1 Full name - Azərbaycan İnvestisiya Holdinqi; Abbreviated name - AİH;

1.7.2. Full name in English - Azerbaijan Investment Holding; Abbreviated name in English - AIH.

1.8. AIH is located in Baku city.

2. AIH activity directions

2.1. Main activity directions of AIH are as follows:

2.1.1. to ensure the development of the relevant field;

2.1.2.  to participate in the development and implementation of relevant field;

2.1.3. to carry out  cooperation with concerned state-owned enterprises in the relevant field, to participate in the development and implementation of proposals;

2.1.4. to organize the management of state-owned enterprises using advanced international experience;

2.1.5. to improve financial health and standing of the state-owned enterprises, and to that effect, to manage their financial assets, as well as the attraction of foreign direct investments based on effective criteria;

2.1.6. to attract private investments to public service markets where state-owned enterprises are operating and, to that effect, to stimulate the public-private partnership;

2.1.7. to enforce key performance indicators of state-owned enterprises to measure their operational efficiency;

2.1.8. to ensure accountability and transparency  in state-owned enterprises;

2.1.9.to increase the international competitiveness of state-owned enterprises;

2.1.10. effective implementation of financial control of public investments;

2.1.11. to ensure the preparation for privatization (complete or partial) of state-owned enterprises;

2.1.12. to operate in fulfilling any other directions determined by this Charter.

3. AIH duties and rights

3.1. In accordance with the areas of activities defined by this Charter, AIH duties are as follows:

3.1.1. to participate in the development and implementation of the statutory regulations, development concepts, and target programs;

3.1.2. except for cases determined by the President of the Republic of Azerbaijan, to ensure management of the state-owned shares in the state entities;

3.1.3. to achieve the development of state-owned enterprises by the attraction and efficient management of investments and to ensure their pre-privatization turnaround;

3.1.4. to issue an opinion for approval of the long-term development and business plans of state-owned enterprises, to perform monitoring of targets set in the business plans;

3.1.5. to prepare proposals and take measures in order to stimulate the attraction of investments, including foreign investments to the areas of activity of state-owned enterprises;

3.1.6. strengthen economic efficiency of state-owned enterprises, as well as, to take measures for improvement of financial situation and increase of income;

3.1.7. to give proposals for ensuring the quality of services in activity areas of state-owned enterprises;

3.1.8. to participate in the development and implementation of economic modernization and diversification programs;

3.1.9. to participate in innovative industrial projects of social importance implemented in order to ensure the sustainable development of the economy;

3.1.10. to make suggestions on the restructuring of state-owned enterprises;

3.1.11. to identify requirements to state-owned enterprises reports and to monitor submitted reports;

3.1.12. to take measures for coordination of the activities of state-owned enterprises taking into account the international experience and improvement of their economic efficiency, including financial standing;

3.1.13. to evaluate the efficiency of the activity of state-owned enterprises based on the analysis of their performance indicators;

3.1.14. to demand necessary information and reports from state-owned enterprises in order to optimize their costs, to analyze provided information and reports and to give relevant feedbacks to management bodies of state-owned enterprises;

3.1.15. to take measures for the establishment of the governance structure in state-owned enterprises;

3.1.16. to analyze the activity of management bodies of state-owned enterprises;

3.1.17. to take comprehensive measures enabling the efficient access of state-owned enterprises to the financial resources;

3.1.18. to take measures for stimulation, support and promotion of innovative activity in state-owned enterprises;

3.1.19. to assess the factors affecting competitiveness and export potential of state-owned enterprises;

3.1.20. to create a unified electronic information system containing data of the activities of state-owned enterprises;

3.1.21. to analyze the economic-financial situation of state-owned enterprises and take measures for improvement of their performance efficiency;

3.1.22. to ensure efficient and purposeful utilization of budget, loans, grants and other financial resources allocated to AIH and state-owned enterprises;

3.1.23. to coordinate activities of state-owned enterprises and entities, local authorities, legal entities and individuals in relevant area;

3.1.24. to organize electronic services in the relevant field in accordance with Decree No 263 of the President of the Republic of Azerbaijan dated September 12, 2018 “On approval of the “Rules for the Formation, Implementation, Integration and Archiving of State Information Resources and Systems’’ and some Measures on E-Government";

3.1.25. disclosure information about its activities, to create a website, to place public information to be disclosed as per the Republic of Azerbaijan Law “On Obtaining of Information” in this website and to ensure constant update  of this information;

3.1.26. to take measures to improve the structure and activities of AIH;

3.1.27. to take measures for the protection of state and commercial secrecy and confidentiality regime;

3.1.28. to ensure information provision of AIH and its protection;

3.1.29. to review the appeals received in connection with AIH activity in accordance with the laws of the Republic of Azerbaijan “On appeals of citizens”, “On administrative proceedings” and “On obtaining information”and to take measures in accordance with the law;

3.1.30. to organize clerical work and reception of citizens in accordance with the requirements of relevant statutory regulations, to take measures for advanced training and professional development of AIH staff;

3.1.31. to ensure the application of scientific and technical achievements in the field of activity, taking into account advanced international experience;

3.1.32. to make suggestions on the training of professional specialists in relevant area and development of education programs, to participate in their implementation;

3.1.33. to ensure fulfillment of obligations undertaken by the Republic of Azerbaijan in connection with the issues arising from the international agreements ratified by the Republic of Azerbaijan and within the authority of AIH.

3.1.34. to prepare and submit proposals on reforms of matters related to its activity directions;

3.1.35. to arrange the procurement of goods (works and services) and cater to the necessary needs of the relevant area in accordance with the Law of the Republic of Azerbaijan “On Public Procurement”;

3.1.36. to perform any other duties perform in this Charter and the resolutions of the President of the Republic of Azerbaijan;

3.2.  To carry out activity directions, AIH has the following rights:

3.2.1. to make relevant proposals on the adoption of draft statutory regulations in the relevant field, modification, commenting, invalidation or cancellation of the regulations;

3.2.2. to perform investigations related to the business profile, to establish working groups and commissions;

3.2.3. granting personnel to state awards and prizes, to take measures for their stimulation;

3.2.4. to make proposals on international treaties to which the Republic of Azerbaijan is a party;

3.2.5. to involve independent experts and specialists in its activity on a contractual basis;

3.2.6. to cooperate with international organizations and state authorities (bodies) of foreign countries, to study the experience of foreign states in the field of activity;

3.2.7. to submit a request for necessary information (documents) to state authorities and entities, local self-governing entities, individuals and legal entities on issues related to the directions of activity and receive such information (documents) from them;

3.2.8. to give binding instructions and undertake other respective measures;

3.2.9. to give feedback on the directions of activity, to carry out analysis, generalizations, monitoring and research, to prepare analytical materials;

3.2.10. to organize conferences, discussions, workshops and other events related to the activity directions;

3.2.11. to establish or participate in business units for the fulfillment of the duties;

3.2.12. issue special bulletins and other publications;

3.2.13. to perform other rights determined by this Charter and the resolutions of the President of the Republic of Azerbaijan.

4. AIH Management

4.1. In its activity, AIH shall use advanced corporate governance principles.

4.2. AIH governance body consists of the Supervisory Board and the Executive Board.

4.3. AIH Supervisory Board (hereinafter the Board) oversees AIH's activities.

4.4. The Board consist of 5 (five) members appointed and dismissed by the President of the Republic of Azerbaijan - the Chairman and other members.

4.5. The Board operates on a  voluntary (unpaid) basis.

4.6. The Board shall be free to adopt decisions.

4.7. The Board have the following duties:

4.7.1. to make proposals  and relevant documents (including AIH financial reports and annual activity report)  to the President of the Republic of Azerbaijan for the fulfillment of the founder’s authorities;

4.7.2. to define development directions, strategic goals and plans of  AIH;

4.7.3. to approve annual financial report of AIH;

4.7.4. to approve AIH financial forecasting and budget;

4.7.5. to regulating activities of AIH;

4.7.6. to consent to the establishment of or participation in business units of AIH, including the establishment of offices, branches and representative offices;

4.7.7. to control and inspect the activity of the Executive Board;

4.7.8. to review and make a decision on inquiries of the Board and Executive Board members;

4.7.9. to appoint AIH external auditor and submit the audit report;

4.7.10. to review audits of the external auditor, as well as other inspections and make proposals on respective measures;

4.7.11. to control the activity of the internal audit department of AIH, if any, to receive its reports, to appoint and dismiss the members of the department as well;

4.7.12. to adopt a decision on the conclusion of a transaction  total value more than 25 per cent of value of AIH net assets (deal of special significance) and conclude agreements with the relevant person in the value is 5 or more per cent of AIH assets;

  4.7.13. to approve the internal rules of AIH (including the rule of exclusion of conflicts of interest), as well as the regulations of offices, branches and representative offices, the charters of subsidiaries;

  4.7.14. to approve the structure of AIH, the number of employees and their salary fund (including pay supplements, bonuses and other payments, taking into account the relevant rules approved by the Cabinet of Ministers of the Republic of Azerbaijan);

4.7.15. to appoint and dismiss the members of the Executive Board in accordance with Clause 4.19 of this Charter;

4.7.16. to make the decision considered by Article 3.3 of the Law of the Republic of Azerbaijan “On public legal entities";

4.7.17. to hear AIH's annual activity report;

4.7.18. to resolve the issues of the state enterprises, within the exclusive competence of the supreme governing body, in accordance with the Civil Code of the Republic of Azerbaijan, in coordination with the President of the Republic of Azerbaijan;

4.7.19. to approve the system of performance appraisal of the Supervisory Board members 

4.7.20. to carry out any other duties determined by this Charter.

4.8. The Chairman of the Board convenes meetings at least once a year. The Board member or Chair of the Supervisory Board initiates the meetings. The Board meetings are valid if more than half of the members are present. Board decisions shall be taken by a simple majority of one vote of each member. Members are not allowed to abstain during the voting. In the case of a tie in votes, the vote of the Chairman will be casting.

4.9.The Board members shall receive written notification about the agenda, time and venue, with the addition of all necessary documents at least 3 (three) business days prior to the meeting.

4.10.Executive Board members attend a Board meeting.

4.11. In case, one of the issues debated at the agenda affecting the personal interest of any of the members, must disclose this information before the meeting and abstain from participating in the discussion.

4.12. Decisions on issues not listed in the agenda or all required documents have not been submitted before the meeting, except the cases where all participants agree on the discussion of the issue will not be released.

4.13. The Decisions of the meetings of the Supervisory Board are being reflected in the minutes. The minutes shall be signed by the Board members and Secretary of the Supervisory Board. In case the Secretary of the Board is unable to attend the meeting the Chairman of the Board shall appoint an acting (deputy) Secretary. The Board shall affirm the minutes and send them to the Executive Board.

4.14. The Board Secretary shall be appointed by the Board Chairman among the employees, who is not a member of the Board and the Secretary is accountable to the Board Chairman.

4.15. The Board Secretary shall:

4.15.1. organize the Board meetings;

4.15.2. send written notification to the Chairman and Board members about the time and venue at least 3 (three) business days prior to the meeting

4.15.3. draw up the  minutes of the meetings and submit them to the Board members for signing;

4.15.4.prepare draft decisions of the Board and submit to the Chairman for review and signing;

4.15.5. ensure forwarding the decisions adopted by the Board to concerned parties.

4.16. The Board Chairman shall:

4.16.1. organize the work of the Board and leads its activity;

4.16.2. determines the agenda of the Board meetings, convene and chair the meetings;

4.16.3. invite other persons to participate in the Board meeting on its own initiative or at the request of any other Board member or the Chair of the Executive Board;

4.16.4. undertakes other measures related to the activity of the Board.

4.17. Members of the Board shall:

4.17.1. participate in resolving issues under the authority of the Board;

4.17.2. get acquainted in advance with the agenda of the Board meeting and materials considered to be reviewed;

4.17.3. express their views on decisions to be adopted in the Board;

4.17.4. make proposals on reviewing the issues within the Board authority to be discussed in the Board meetings;

4.17.5. get acquainted with the decisions of the Board, minutes and other related documents.

4.18. The Board members shall be impartial in their approach to issues considered in the Board meetings, prevent inappropriate actions and speeches that may damage the reputation of a Board member, as well as take other measures stipulated in Article 49 of the Civil Code of the Republic of Azerbaijan.

4.19. The Executive Board consists of 5 (five) members - the Chairman of the Executive Board and other members. The Chairman of the Executive Board is appointed and dismissed by the President of the Republic of Azerbaijan. One of the members of the Executive Board is also a Chief Executive Officer, who is responsible for the management of AIH. Other members of the Executive Board, including the Chief Executive Officer, shall be appointed and dismissed upon the recommendation of the Chairman of the Supervisory Board.

4.20. The Executive Board's meeting shall be convened at least once (1) a month. The Executive Board member or Chair of the Executive Board initiates the meetings. The Executive Board meetings are valid if more than half of the members are present. Board decisions shall be taken by a simple majority of one vote of each member. Members are not allowed to abstain during the voting. In the case of tie in votes, the vote of the Chief Executive Officer will be casting (or any other member acting on his/her behalf). The provisions of paragraphs 4.9, 4.11 and 4.12 of this Charter shall apply to the meeting of the Executive Board.

4.21. In case of temporary absence of the Chairman of the Executive Board and Chief Executive Officer are not temporary, their powers shall be exercised by a person appointed by the Chairman among the members of the Executive Board.

4.22. The Executive Board duties are as follows:

4.22.1. to organize the activity of AIH;

4.22.2. to execute the decisions of the Board;

4.22.3. to submit proposals and documents to the Board for fulfilling the duties determined by this Charter;

4.22.4. to decide on the conclusion of a transaction with the relevant person, the value of which is up to 5% of AIH assets;

4.22.5. to control the performance of AIH strategic goals and plans, as well as its budget;

4.22.6. to ensure efficient and purposeful use of resources provided in sub-article 3.1.22 of this Charter;

4.22.7. to inform the Board about current and operative issues;

4.22.8. To review and make a decision on appeals of the Executive Board members;

4.22.9. to undertake measures to resolve the issues considered by sub-clauses 3.1.1. and 3.2.1 of this Charter;

4.22.10. to make decisions on all other issues, not in the competence of the Supervisory Board, the Chairman of the Executive Board and Chief Executive Officer.

4.23. The Chairman of the Executive Board:

4.23.1. organizes the activity of the Executive Board, determines the agenda of the meetings and chairs the meetings;

4.23.2. makes decisions on other issues not included in the authorities of the Supervisory Board, Executive Board and Chief Executive Officer

4.24. Members of the Executive Board :

4.24.1. participate in settlement of issues within the Executive Board competence;

4.24.2. get acquainted in advance with the agenda of the Executive Board meeting and materials considered to be reviewed;

4.24.3. express views on decisions to be taken by the Executive Board;

4.24.4. make proposals on review of the issues within the competence of the Executive Board at its meetings;

4.24.5. get acquainted with decisions of the Executive Board, minutes of meeting and other documents.

4.25. Chief Executive Officer:

4.25.1. manages the activities and represents AIH;

4.25.2. convenes the meetings of the Executive Board by his own initiative, at the initiative of the Chairman of the Executive Board, other members of the Board;

4.25.3. invites other persons to attend the Executive Board meetings on its own initiative or at the request of any other Executive Board member;

4.25.4. approves structure, employee roster and cost estimates of AIH Office, departments, branch and representative offices, as well as business units within the specified structure, salary fund and the upper limit of employees;

4.25.5. provides the salary payments, provision of additions, financial assistance and rewards to the salaries of employees ;

4.25.6.  appoints and dismisses the employees of AIH Office, departments, branch and representative offices foreign countries, as well as the employees of entities under the structure of AIH (in economic societies only managers), takes measures of encouragement and discipline against them;

4.25.7. ensures the effective use of funds allocated for AIH from the sources stipulated in the legislation for the fulfillment of its duties;

4.25.8. adopt decisions on establishment and usage of centralized funds of AIH in coordination with the Board;

4.25.9. reviews draft legal regulations for the improvement of AIH's activities and submit them to the relevant authorities;

4.25.10. control intended usage of AIH property as stipulated in this Charter;

4.25.11. organizes, checks and carries out control over legal acts adopted on AIH activity;

4.25.12. issue binding internal orders, decrees and directives related to AIH activity;

4.25.13. conducts operations, signs contracts and ensures their implementation on behalf of AIH within the competence specified in this Charter;

4.25.14. takes measures for the protection of state secret and confidentiality regime, as well as other information protected by law;

4.25.15. establishes advisory committees and working groups related to AIH business profile;

4.25.16. abolishes the decisions of AIH officials that contradict the legislation;

4.25.17.  organizes clerical and archive work in AIH;

4.25.18. ensures reception of citizens and reviewing their appeals;

4.25.19. adopt decisions on all other issues not within the competence of the Supervisory Board, Executive Board and the Chairman of Executive Board.

4.26. The Executive Board members shall be unbiased to issues reviewed in its meetings, shall avoid behaviors and actions damaging the reputation of an Executive Board member, as well as take other measures stipulated in Article 49 of the Civil Code of the Republic of Azerbaijan.

5. AIH charter capital, property and principles of its financial activity

5.1. AIH’s statutory capital is AZN 10,000,000 (ten million).

5.2. AIH property is formed from charter capital, other property granted by the founder, funds allocated from the state budget for financing of initial establishment and maintenance of activities, as well as an income obtained from activities, donations, grants, attracted investments and other funds not prohibited by law.

5.3. AIH shall use its property only in accordance with the purposes set forth in this Charter, performs in relation to the state property on its balance sheet in accordance with the Decree No 586 of the President of the Republic of Azerbaijan dated June 6, 2007, “On the preservation and effective utilization of the state property”.

5.4. AIH shall have the right to independently dispose of profits obtained from the activities of AIH, its departments, branches and representative offices, business units, as well as other subordinate entities, after payment of taxes and other obligatory payments provided by law. AIHs profit may be transferred to the state budget only by the decision of the Supervisory Board for the purposes not considered in this Charter.

5.5.  AIH products (goods, works, services) prices are not regulated prices (except the fees payable by state-owned enterprises).

6. Supervision of AIH activity directions

6.1. General supervision over AIH's activities shall be controlled by the President of the Republic of Azerbaijan, as well as AIH governance bodies in accordance with this Charter.

6.2. AIH's annual activity report shall submited to the President of the Republic of Azerbaijan.

7. Accounting and reporting in AIH

7.1. AIH  maintains accounting, prepares, submits, and publishes financial statements in accordance with the Law of the Republic of Azerbaijan “On accounting”.

7.2.  AIH compiles and submits statistical data in accordance with the Law of the Republic of Azerbaijan“On official statistics”.

7.3. AIH ensures the inspection of financial and business activity conducted by the departments, branches, representative offices and business units, as well as other subsidiary organizations.

7.4. AIH invites an external auditor for an independent audit of its activities.

8. Reorganization and termination

Issues related to the reorganization and termination of the Company are solved by the President of the Republic of Azerbaijan.