1. General provisions
1.1. Azerbaijan Investment Holding (hereinafter “AIH”) is a public legal entity performing in the area of managing state-owned enterprises and entities well as business units with partial state ownership (hereinafter state-owned enterprises), 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 sustainability (hereinafter referred to as the relevant field).
1.2. AIH shall perform according to the Constitution of the Republic of Azerbaijan, international treaties to which the Republic of Azerbaijan is a party, legislation of the Republic of Azerbaijan, present 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 enactments.
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 implementing of its objectives and obligations.
1.4. AIH shall be engaged in activities of national and/or public importance. AIH shall enjoy the right to perform entrepreneurship activities in order to achieve the goals set forth in this Chapter.
1.5. AIH shall have its own balance sheet, property in use, treasury and bank accounts, a seal with an engraved its own name, appropriate stamps and letterheads, a logo.
1.6. AIH, on its behalf, may conclude agreements and transactions, acquire and execute property and private non-property rights and obligations, act as a claimant or defendant in the court proceedings.
1.7. The name of AIH:
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 subject of performance
2.1. Main subjects of AIH performance shall be:
2.1.1. fostering the development of the relevant field;
2.1.2. participation in the development and implementation of state policy on the relevant field;
2.1.3. cooperation with authorized state bodies in the relevant field, participation in the development and elaboration of proposals;
2.1.4. introduction best international practices to AIH portfolio;
2.1.5. improving financial health and sustainability of the state-owned enterprises, effective management of their financial assets, as well as the attraction of foreign direct investments;
2.1.6. participation in attracting investments to public service, creation of the public-private partnership;
2.1.7. determination and monitoring of key performance indicators of AIH ;
2.1.8. ensure accountability and transparency in state-owned enterprises;
2.1.9. implementation best world practice of corporate governance in state-owned enterprises;
2.1.10. perform effective control over financial and investment performance of public investments;
2.1.11. ensure the preparation for privatization (complete or partial) of state-owned enterprises;
2.1.12. perform in fulfilling any other directions determined by this Charter.
3. AIH rights and obligations
3.1. In accordance with the areas of activities defined by this Charter, AIH rights shall be:
3.1.1. participation in the development and implementation of the statutory regulations, development concepts, and target programs;
3.1.2. ensure management of the state-owned shares in the state entities, except for cases determined by the President of the Republic of Azerbaijan;
3.1.3. creation of conditions for investment activities of state-owned enterprises by the attraction and efficient management of investments and ensure their pre-privatization turnaround;
3.1.4. issue an opinion for approval of the long-term development and business plans of state-owned enterprises, monitoring of targets set in the business plans;
3.1.5. elaboration proposals and stimulation the attraction of investments, including foreign investments to state-owned enterprises;
3.1.6. to enhance the economic efficiency of state-owned enterprises, including maximization of their financial performance as well;
3.1.7. provision proposals to ensure high quality of services in activity areas of state-owned enterprises;
3.1.8. participation in the development and implementation of programs to modernization and diversify the economy;
3.1.9. participation in the innovative industrial projects of social scale for sustainable development of Azerbaijan’s economy;
3.1.10. provision recommendations on the restructuring of state-owned enterprises;
3.1.11. approval of requirements to state-owned enterprises reports and monitoring;
3.1.12. introduction best international practices to state-owned and maximization their economic efficiency and sustainability;
3.1.12-1. approval of best corporate governance practices for the management of state-owned enterprises;
3.1.13. evaluation 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, analyze provided information and reports and to give relevant feedback to management bodies of state-owned enterprises;
3.1.15. provision of recommendations for the establishment of the composition of governance bodies in state-owned enterprises;
3.1.16. analyze of the activity of governance bodies of state-owned enterprises;
3.1.17. taking comprehensive measures for efficient access of state-owned enterprises to the financial resources;
3.1.18. taking comprehensive measures for stimulation, support and implementation 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. creation centralized electronic information system containing all data 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. determination of the efficient and purposeful utilization of budget, loans, grants and other financial resources allocated to state-owned enterprises;
3.1.23. coordination activities of state-owned enterprises and entities, local authorities, legal entities and individuals in relevant area;
3.1.24. provision 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. information disclosure on activities, creating a website, publishing information as per the Republic of Azerbaijan Law “On Obtaining of Information” on AIH website and (or) in periodicals provided in the prescribed manner;
3.1.26. taking measures for improvement of AIH structure and activities
3.1.27. protection of state secrecy and keeping commercial confidentiality;
3.1.28. provision and protection of AIH information system;
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 taking measures in accordance with the law;
3.1.30. organization clerical work and reception of citizens in compliance with the legislation of the Republic of Azerbaijan, to ensure training and professional development of AIH staff;
3.1.31. implementation scientific-technical innovations in the activity area, using best international practices;
3.1.32. training of professional specialists in relevant areas 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. elaboration of proposals on reforms of issues related to AIH activity;
3.1.35. to arrange the procurement of goods (works and services) and cater to the necessary needs of the relevant area as per the Law of the Republic of Azerbaijan “On Public Procurement”;
3.1.36. to bear obligations as provided in this Charter and in 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. participation in elaboration of proposals on statuary regulations, taking into account the peculiarities of their realization by AIH;
3.2.2. establishment of working groups and commissions on performance areas;
3.2.3. granting personnel to state awards and prizes, to take measures for their stimulation;
3.2.4. to make proposals on the treaty-making process in 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. cooperation with international organizations and foreign state authorities (bodies), introduction their best practices;
3.2.7. obtaining information (documents) on state authorities and entities, local self-governing entities, individuals and legal entities performance;
3.2.8. determination key performance actions and taking respective measures for immediate activity;
3.2.9. monitoring and analyzing performance, evaluation of the implementation of activity;
3.2.10. holding conferences, discussions, workshops and other events related to AIH performance;
3.2.11. establishment or participation in business units for the fulfillment of the duties;
3.2.12. issuing special bulletins and other publications;
3.2.13. perform actions the list of which is determined by the legislation of the Republic of Azerbaijan and this Charter.
4. AIH Management
4.1. In its activity, AIH shall use advanced corporate governance principles.
4.2. AIH’s governance bodies are: the Supervisory Board and the Executive Board.
4.3. AIH Supervisory Board (hereinafter the Board) oversees AIH's activities.
4.4. The Board consists 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 has decision-making rights.
4.7. The Board shall execute the following functions:
4.7.1. provision of recommendations and relevant documents (including AIH’s financial reports and annual financial report) for review to the President of the Republic of Azerbaijan;
4.7.2 determination of development plans, strategic goals and standards of AIH;
4.7.3 approval of the annual report of AIH;
4.7.4. approval AIH financial forecasting and budget;
4.7.5. monitoring and analyzing the performance of AIH;
4.7.6. regulations on branches and representative offices of AIH;
4.7.7. ensure the activity of the Executive Board;
4.7.8. review and decision making on inquiries of the Board and Executive Board members;
4.7.9. to ensure audit service and submission audit report of AIH;
4.7.10. to review audit reports, as well as other inspections and make proposals;
4.7.11. to control the activity of the internal audit department, determination of quantitative composition, the term of the Internal Audit, a determination of the order of work of Internal Audit Service;
4.7.12 deciding on conclusion of a transaction or a set of interrelated transactions which value is more than 25 per cent of the value of AIH net assets (deal of special significance) and agreements with the relevant person value of which is 5 or more per cent of AIH assets
4.7.13. approval of documents regulating the internal operations 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. approval of the staff numbers, payroll schedule and organizational structure of AIH (including bonuses and other payments, taking into account the relevant rules approved by the Cabinet of Ministers of the Republic of Azerbaijan);
4.7.15. appointment and the members of the Executive Board in accordance with Clause 4.19 of this Charter;
4.7.16. decision making based on Paragraph 3.3 of the Law of the Republic of Azerbaijan “On public legal entities";
4.7.17. hearing AIH's annual report;
4.7.18. recommendations on issues of SOEs, 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 approval of the system of performance appraisal of the Supervisory Board members;
4.7.20. other obligations prescribed in this Charter.
4.8. The Chairman of the Board calls for meetings of the Board of Directors at least once a year. The Board member or Chair of the Supervisory Board initiates the meetings. The quorum for holding a meeting of the Supervisory Board shall be over half of the members of the Board. Each member of the Supervisory Board shall have one vote. Members are not allowed to abstain during the voting. In the event of an equal number of votes, the vote of a person chairing the meeting of the Board of Directors shall be a casting vote.
4.9.The agenda of the meeting, notifications on meetings with the annexation of all necessary materials, date and time shall be sent to the members of the Supervisory Board of AIH at least 3 (three) calendar days prior to the meeting.
4.10.The members of the Executive Board of AIH shall attend a Supervisory Board meeting.
4.11. If the issues submitted for consideration falls within of interests of one of the Board members, it must be discussed before the meeting and this member should 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. Decisions of the meetings of the Supervisory Board taken at its in-presence meeting shall be recorded in minutes made up and signed by the Board members and Secretary of the Supervisory Board. In case the Secretary of the Board is absence the Chairman of the Board shall appoint an acting (deputy) Secretary. The Board shall affirm the minutes and send them to the Chair of the Executive Board.
4.14. The Secretary of the Supervisory Board 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 Secretary shall:
4.15.1. organizes work of the Supervisory Board;
4.15.2. sends 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. draws up the minutes of the meetings and submit them to the Board members for signing;
4.15.4. prepares draft Decisions of the Board and submit them to the Chairman for review and signing;
4.15.5. ensures forwarding the decisions adopted by the Board to concerned parties.
4.16. The Chairman of the Supervisory Board shall:
4.16.1. organizes the work of the Board and leads its activity;
4.16.2. determines the agenda of the Board meetings, calls and chairs the meetings;
4.16.3. invites 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 with the agenda of the Board meeting and materials considered to be reviewed prior to the meeting;
4.17.3. express their views on decisions to be adopted in the Board;
4.17.4. have the right on reviewing the issues within the Board authority to be discussed in the Board meetings;
4.17.5. be informed with the decisions of the Board, minutes and other related documents.
4.18. 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 shall consist 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 terminated upon the recommendation of the Chairman of the Supervisory Board.
4.20. The Executive Board's meeting shall be held at least once (1) a month. A meeting shall be called by the Chairman of the Executive or by the Executive Board. The Executive Board meetings are valid if more than half of the members are present. Decisions of the Executive Board shall be taken by a simple majority of votes from members of the Board of Directors present at the meeting. Members are not allowed to abstain during the voting. In the event of an equal number of votes, the vote of the Chairman of the Executive Board or a person chairing the meeting shall be a casting vote. 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. By the temporary absence of the Chairman of the Executive Board and Chief Executive Officer, their powers may be delegated from the members of the Executive Board appointed by the Chairman.
4.22. The Executive Board shall:
4.22.1. manage day-to-day activities of AIH;
4.22.2. execute the decisions of the Board;
4.22.3. submit proposals and documents to the Board for fulfilling the obligations determined by this Charter;
4.22.4. decision making on conclusion of transactions with the relevant parties, which value up to 5% of AIH assets;
4.22.5. ensure fulfillment of current and prospective plans and programs, as well as AIH’s budget;
4.22.6 bear responsibility to the Executive Board for AIH operation;
4.22.7. report the Supervisory Board about current and operative issues of AIH;
4.22.8. review and make a decision on any appeals of the Executive Board members;
4.22.9. take decisions on issues in compliance of sub-clauses 3.1.1. and 3.2.1 of this Charter;
4.22.10. take 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 shall:
4.23.1. organize the work of the Executive Board, determines the agenda of the meetings and hold a meeting;
4.23.2. make 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 shall:
4.24.1. decision making on issues within the Executive Board competence;
4.24.2. preview the agenda of the Executive Board meeting and materials prior to the meeting;
4.24.3. express views on decisions to be taken by the Executive Board;
4.24.4. elaborate of proposals on review of the issues within the competence of the Executive Board;
4.24.5. get acquainted with decisions of the Executive Board, minutes and other documents.
4.25. Chief Executive Officer shall:
4.25.1. manages the performance and represents AIH;
4.25.2. calls meetings of the Executive Board on his own, the Chairman of the Executive Board, or other memberof the Board initiative;
4.25.3. invites related persons to attend the Executive Board meetings on its own or initiative any other member of the Executive Board;
4.25.4. approves structure, employee salary 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. decides on the salaries, remuneration and bonus to the AIH’s employees ;
4.25.6. decision making on appointment and termination of the employees of AIH, heads of executive bodies of the national companies as well as legal entities of which are under AIH management, takes measures of encouragement and discipline against them;
4.25.7. ensures the effective management of assets allocated for AIH from the sources stipulated in the legislation for the fulfillment of its activity;
4.25.8. ensures establishment and management of centralized Funds of AIH upon approval of the Supervisory Board;
4.25.9. reviews draft legal enactments on the improvement of AIH's activity and submit them to the relevant authorities;
4.25.10. control intended usage of AIH property as stipulated in this Charter;
4.25.11. ensures, checks and carries out controls over legal enactments on AIH activity;
4.25.12. issue binding internal orders, decrees and internal legal normative enactments on AIH activity;
4.25.13. conclusion transactions, where there is an interest of AIH and ensures their implementation within the competence specified in this Charter;
4.25.14. ensures protection of state or commercial secret, as well as other information protected by the law;
4.25.15.establishing working groups and commissions on the issues of interaction with SOE;
4.25.16. abolishes the decisions of AIH officials in contradiction the legislation;
4.25.17. ensures clerical and archive performance 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 submitted to the President of the Republic of Azerbaijan.
7. Accounting and reporting in AIH
7.1. AIH ensures 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 assignment of the inspection of financial and business activity ) in Companies and other legal entities which are under the management of AIH, 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 AIH are solved by the President of the Republic of Azerbaijan.