„FBiH Official Gazette “, No.

24/06, 30/07

FEDERATION OF BOSNIA AND HERZEGOVINA

JOINT- STOCK COMPANY GOVERNANCE REGULATIONS

I. GENERAL PROVISIONS AND TERM DEFINITIONS

Article 1

These regulations shall set forth the standards of governing a joint-stock company (hereinafter: stock
company) that relate to the appointment and the dismissal of the stock company’s bodies, the duties
and responsibilities of these bodies and their members in the managing procedures of the stock
company, the management of business operations of the stock company and the rights and duties of
shareholders and other interested parties in the stock company.

Article 2

The terms used herein shall have the following definitions:

a) large stock company shall mean a stock company with more than 100 shareholders;
b) fund management company and investment fund define a company for managing funds and
closed investment fund in accordance with the law that defines the conditions and methods
of establishing and operating a fund management company and investment funds;
c) efficient and orderly management is the management of a stock company that enables each
stockholder to plan and present its interests and aims and enables each partaker to assess the
behavior of the other stockholder;
d) personal interest defines direct or indirect personal financial or economic interest of an
individual or other entity with significant influence or control over the individual;
e) exponent of material interests defines a private or legal entity with material interest in the
stock company (ex: employees);
f) information publishing defines the publishing of information by the stock company or other
entities stipulated by law or regulations as a condition for the transparency of securities
market;
g) privileged information is information on the stock company and its securities in accordance
with the law that defines the issuing and turnover of securities
h) conflict of interest refers to cases when personal interest in an operation can have influence
on an entity in a manner that it effects or controls the operation contrary to the best interest
of the stock company or its shareholder;
i) transparency of securities market represents a possibility for the shareholders of the stock
company, the potential investors and other interested parties to assess the stock company;
j) the partakers in the stock company are shareholders, members of the management and
supervisory boards, exponents of material interest and other interested parties;
k) management of a stock company represents the mechanisms or a system that manage the
stock company in accordance with the law and regulations and where partakers present
their interests and on the basis of reciprocity;
l) significant effect and control shall mean the effects and control pursuant to Article 12 of the
Law on Securities (FBiH Official Gazette, no. 39/98 and 36/99)
II. PRINCIPLES, OBJECTIVES AND ENFORCEMENT

Article 3

Management of a stock company shall be based on the following principles:

a) equal treatment of all shareholders;
b) observance of the rights of exponents’ material interests and instigation of cooperation
between the stock company and the exponents of material interests;
c) ensuring of complete, timely and accurate presentation of all important facts that relate to
the stock company including financial accounts, results, ownership structure and
management of the stock company;
d) ensuring of accurate, relevant and complete information to and on stock company Boards;
e) complying with the requirements of responsibility, professionalism and independence from
the viewpoint of the external auditor.

Article 4

The objective of these regulations is to enable efficient management of the stock company, provide
investor security and transparency of the securities market.

Article 5

(1) Management of a stock company shall ensure:

a) protection of minority shareholders;
b) compulsory and timely publishing of the proportions in the stock company’s ownership
structure in accordance with the law;
c) protection of the right of pre-emption in the new emission of shares;
d) equal and timely access to information;
e) protection from violation of privileged information;
f) ensuring equal and fair access to the shareholders in observing their management rights;
g) prevention and announcement of conflicts of interest.
(2) The rights of shareholders include the right to: the protection of ownership rights, timely and
regular inflow of relevant information for the stock company, participation in the work of the
shareholders Assembly, nomination and appointment of new members of the Supervisory
Board and Auditor’s Board, sharing in stock company’s profits and other right stipulated by
the law and regulations.
(3) The rights of exponents of material interest include the right to timely and accurate
information on business operations of the stock company, the right to achieve their interests
in accordance with the law, other regulations, statute and other general by-laws of the stock
company, including the rights stipulated by the law and regulations.
(4) The rights of potential investors include the right to timely and accurate information on
business operations and ownership structure in of the stock company.
 Article 6

(1) The provisions of this regulation shall be enforced in the following manner:
a) by compulsory regulation in the stock company’s statute stipulated by the herein
regulation;
b) the stock company can regulate certain issues with its statute or other general by-law
if provided by this regulation;
c) the stock company shall compulsorily and directly enforce the provisions as
provisions resulting from the Law;
(2) These provisions shall be applicable to all public companies pursuant to Law on Public
Companies “FBiH Official Gazette no. 8/05) provided that they do not breach the provisions
of the Law and its by-laws.

III. CONFLICT OF INTEREST

Article 7

Parties engaged in a conflict of interest within the stock company are obliged to be guided in their
work by the interest of the stock company and its shareholders.

Article 8

Parties mentioned in Article 7 of this regulation are obliged to carry out their operation in line with
reasonable conviction and to act in the best interest of the stock company upon which they shall base
their assessment on reliable information and stances on relevant issues provided by authorized
entities.
Article 9

Parties mentioned in Article 7 of this regulation are not to use the property of the stock company, the
privileged information nor corporate opportunities of the stock company in their personal interest.

IV. SHAREHOLDERS ASSEMBLY

Article 10

(1) The shareholders Assembly shall be convened when determined by law, other regulations and
statute of the stock company and when it is assessed that it shall be in the best interest of its
shareholders.
(2) The statute of the stock company regulates the methods of preparation and publishing of an
announcement on convocation of the Assembly pursuant to the law.
(3) The announcement on the convocation of the Assembly shall include the agenda, location,
date and time of the meeting, instructions on granting of authorization and voting process at
the Assembly together with the deadlines for registering for participation at the Assembly.
 Article 11

In circumstances of the Assembly being convened by the shareholders or the Board of Auditors, the
Chairmanship of the Assembly and appointment of Board of decision-makers is determined by the
convener, unless defined contrary by the statute.

Article 12

The statute of a stock company defines the measures that the Supervisory Board is obliged to
undertake with the aim of holding a successful Assembly. The measures can include:
a) making a decision on the venue of the Assembly meeting most convenient for all
shareholders if the Assembly will not take place in the headquarters of the stock company;
b) placing clearly visible announcements on Assembly meeting in the official premises of the
stock company;
c) other measures that would contribute to a successful Assembly meeting.

Article 13

(1) The announcement on convening a shareholders Assembly pursuant to paragraph 3, Article

10 of this Regulation shall be published in at list one of the daily newspapers in Federation of
BiH (hereinafter: FBiH) latest 30 days before the date of the Assembly.
(2) A large stock company shall additionally publish its announcement on shareholders
Assembly meeting on its website, provided it has one. In case the stock company does not
have a website, the announcement shall be made by the Securities Commission in FBiH
(hereinafter: Commission) on its website. In these circumstances, the stock company is
obliged to submit the announcement on the Assembly meeting to the Commission as well.
(3) A large stock company is obliged to submit the announcement on a shareholders Assembly
meeting to the shareholders with 0.5% or more shares and voting rights. The large stock
company can publish all the proposals of the decisions and documents that it intends to
discuss at the Assembly on its website.
(4) If the Assembly venue is scheduled outside the premises of the stock company, the
announcement pursuant to paragraph 1 of this Article must be submitted to all the
shareholders by a registered letter, fax or email within the same deadline at the address
pursuant to Article 241 paragraph 3 of the FBiH Law on Public Corporations.

Article 14

(1) The right of attendance at the shareholders Assembly is provided to the shareholders
personally or their proxies.
(2) With the exemption of paragraph 1 of this Article, the shareholder can observe its voting right
at the large stock company shareholders Assembly by voting and signing the voter ballots
which shall be submitted by post, fax or email prior to the date of the Assembly (hereinafter:
absentee voting) under the conditions defined by the statute and pursuant to the law and
provisions of this regulation.
(3) The voting right by completed and signed voter ballots and submitted to the stock company
by email can only be achieved once the electronic signature is regulated by law.
 Article 15

(1) Pursuant to paragraph 2, Article 14 of this regulation, the shareholders shall send a written
notice to the stock company within 5 days of the announcement of the Assembly meeting in
the daily newspapers on their wish to voting at the Assembly by an absentee voting.
(2) Within 3 days of receiving the announcement from the shareholder pursuant to paragraph 1 of
this Article, the stock company shall submit to the shareholder’s address from the list of
shareholders from Article 241 paragraph 3 of the FBiH Law on Public Corporations. by mail,
fax or email the reports and proposals of all decisions resulting from the items included in the
agenda and voter ballots. The shareholder can submit the completed voter ballots latest 3
days prior to the Assembly date.
(3) The stock company’s secretary or an authorized person shall include the date of receiving by
mail or fax the completed voter ballot of the shareholder and its signature and in case to voter
ballot was submitted by email, they shall be listed down and dated with a signature as in case
of receiving the ballots by mail or fax.

Article 16

(1) The scheduled Assembly can be cancelled prior to its venue date in accordance to the
conditions provided in the statute of the stock company.
(2) The canceling of an Assembly is conducted in the same manner as its scheduling. In such a
case, the announcement must be published latest three days prior to the Assembly date.

Article 17

(1) The Assembly can be attended by the shareholders of the stock company or its proxies that
were registered with the Board of voters in accordance and within the deadline provided by
the statute of the stock company and pursuant to the law.
(2) The registration for the Assembly, pursuant to paragraph 1 of this Article, must be equally
accessible to all the shareholders.

Article 18

(1) A proxy can represent one or more shareholders by the power of attorney under conditions
set by law and other regulations.
(2) The members of the management board, Supervisory Board, Board of Auditors and the
employees of the investment fund management company cannot be proxies of the investment
fund shareholders governed by the stock company.

Article 19

(1) A bank with the permit of the Commission for Custody Operations (hereinafter: Custodian)
which represent one or more shareholders shall request instructions and shall vote in line with
the instructions stated in the authorization of the shareholder. In its request for the
instructions, the Custodian shall submit to the shareholder a report with the information on
the Assembly, provided in the Addendum of this Regulation and represents its integral part,
unless the shareholder exempts the Custodian of this task. The Custodian shall be granted the
 right of access to the same information and documentation for the Assembly as its
shareholder, pursuant to the FBiH Law on Public Corporations.
(2) If the shares are listed on the custodian account opened on the name of the Custodian, the list
of shareholders shall include instead of the data on the shareholder and in accordance with
the Article 30, item 1 of the Regulation on Registration and Transfer of Securities with the
Securities Registry (FBiH Official Gazette no. 32/99, 6/01, 51/01 and 10/06) the name of the
company and the location of the Custodian including a note reading that it deals with a
Custodian with a separate custody account opened on behalf of the Custodian.
(3) The Custodian represents the shareholder at the shareholders Assembly upon the letter of
authorization granted by the custodian in accordance with the law, this regulation and other
rules which compulsorily includes the number of shares with the Issuer.
(4) A shareholder with a single Issuer can grant the letter of authorization to only one Custodian
for all the shares with voting rights given by the Issuer.
(5) If the Custodian who is granted a letter of authorization by the shareholder is not given any
instructions he shall vote on reasonable judgment in the best interest of the shareholder.
(6) paragraphs 1-3 of this Article refer as well to legal entities established and registered for
association and representation of shareholders.

Article 20

The investment fund supervisory board shall define the voting policy at the Assembly of this
portfolio and make it available to shareholders of the fund.

Article 21

An entity obtaining letter of authorization from one or more shareholders that individually own less
than 5% of voting shares shall provide to all the shareholders simultaneously the announcement
containing the following information:
a) manner and time of communication with the shareholder;
b) reasons for requesting a letter of authorization;
c) a remark that the latter of authorization can include instructions for the proxy on certain
issues to be discussed by the agenda of the Assembly; in the contrary the proxy shall be
bound to vote within reasonable judgment in the best interest of the shareholder;
d) manner of informing the shareholders on the Assembly and the voting process
e) other important items important for the letter of authorization.

Article 22

The instructions provided in the letter of authorization for a convened Assembly that does not
achieve quorum will be valid for the next Assembly meeting:
a) provided that there shall be no amendments to the agenda and
b) the letter of authorization was not revoked in accordance with the law.
 Article 23

(1) The proxy shall abide by the instructions provided by the shareholder in the letter of
authorization.
(2) The liability of the proxy for achieving the voting right of the shareholder at the Assembly
cannot be excluded or limited by the shareholder that granted the letter of authorization.

Article 24

A shareholder or a group of shareholders with minimum of 5% of voting shares are entitled to draw
up a written proposal for issues and proposals of decisions to be included in the Assembly agenda
pursuant to Article 243 of the FBiH Law on Public Corporations. If the Supervisory Board decides
not to publish the announcements of the shareholders’ proposals stemming from this Article, the
Board shall inform the shareholders that had submitted the proposals latest seven days prior to the
convened Assembly.

Article 25

(1) The members of the voting board cannot be members of the management or the supervisory
board nor parties that hold 5% or more voting shares in the stock company nor parties under
significant effect or control of these parties, excluding stock company employees.
(2) The voting board: draws up a list of present or represented shareholders and their proxies at
the Assembly and verifies their identity, establishes the total number of votes and the number
of votes of each shareholder and proxy, establishes quorum, establishes voting results,
submits voting ballots, the list of present or represented shareholders and other materials
within its scope of duties to the Chairman of the Assembly in accordance with the FBiH Law
on Public Corporations. other regulations and statute of the stock company.

Article 26

The documentation related to the Assembly meeting, exempting documentation pursuant to Article
254 FBiH Law on Public Corporations. will be archived in the period in line with the regulations on
archive and register material.

Article 27

The costs of convening and holding a shareholders Assembly shall be borne by the stock company
unless stated otherwise by the law or these regulations.

V. SUPERVISORY BOARD

Article 28

The Supervisory Board shall exercise its authorities in accordance with the law, other regulations,
these regulations founded on timely and accurate information.
 Article 29

The number of Supervisory board members shall be determined by the statute of the stock company
under condition that the number of members is odd.

Article 30

(1) The statute of a large stock company defines the criteria for the appointment in the
Supervisory Board.
(2) The statute of the investment fund defines, in addition to the items pursuant to paragraph 1 of
this Article, the criteria for the independence of the candidates for the supervisory board
members in accordance with the law and regulations of the Commission.

Article 31

(1) The statute of the stock company can provide that the appointment of the Supervisory board
members is carried out simultaneously with the appointment of the deputy members.
(2) In relation to paragraph 1 of this Article, the statute of the stock company defines the
appointment methods, the rights and the duties of the deputy Supervisory Board members.

Article 32

(1) The Chairman and the Supervisory Board members are appointed simultaneously for duration
of 4 years upon which they sign a contract with the stock company.
(2) Exempting paragraph 1 of this Article, the Supervisory Board member that has been
appointed in place of the dismissed board member and in circumstances where the whole
Supervisory Board has not been dismissed, the successor’s mandate will last until the
mandates of the Board members which have not been dismissed expires.
(3) The mandate pursuant to paragraph 2 of this Article will last in case all the Supervisory
Board members that were appointed in the appointment procedure of the whole Board have
been successively dismissed.

Article 33

The nomination for the Supervisory Board member shall include the necessary information and
documentation that relate to the meeting of conditions in accordance with the law, other regulations
and statute of the stock company.

Article 34

(1) The quorum requirement for a Supervisory Board meeting is two thirds of the total number of
Board members.
(2) In case the two thirds is not a whole number, the two thirds is rounded of to the first higher 1
whole number unless stated otherwise by the stock company.

1
Amendments to Rules of procedure („FBiH Official Gazette“ no. 27/06)
 Article 35

The monitoring over the operations of the management and the stock company by the Supervisory
Board refers to the initiation of all procedures and measures in accordance with the law aimed at
protecting the interests of the stock company.

Article 36

The Chairman and the Supervisory Board members shall perform their duties conscientiously and
with all due attention with loyalty and in the best interest of the shareholders in accordance with the
law and other regulations.

Article 37

(1) The dismissal of the Supervisory Board member can be performed in line with the statute
prior to the expiry of its mandate:
a) upon the request of the Board member;
b) in case the member is unable or fails to perform his function as a Board member;
c) in case of disloyalty to the stock company, illegal and irresponsible performance of
duties and failure to act with all due attention;
d) in other cases proved by the law and statute of the stock company.
(2) The proposal for the dismissal of a Supervisory Board member, exempting cases mentioned
in Article 31 of this Regulation, shall include simultaneously the proposal for the nomination
of a successor.

Article 38

The Chairman and the Supervisory Board members of a large stock company must perform their
operations with all due attention and are responsible for the following:
a) regular participation at the Supervisory Board sessions and scrupulous performance of duties;
b) defining criteria for the appointment and assessment of the work of competent entities
in the stock company and acting upon petitions against the entities;
c) signing of contracts with the management of the stock company which ensures that the
management performs its duties scrupulously and in the best interest of the stock company;
d) dismissal of the management in case they carry out their operations violate the law, this
regulation, signed agreement with the Supervisory Board, the statute and other by-laws of the
stock company;
e) defining rules to prevent conflict of interest, fraud activities, violation and misuse of function;
f) ensuring that the information on benefits and other wages of the management board
members, the Board of Auditor’s and the Supervisory Board members are made available to
the relevant bodies of the stock company;
g) defining rules and procedures for preventing misuse of privileged information;
h) preventing or disallowing in cases provided by law and statute of the stock company and in
cases it fails to serve the best interest of the stock company and its shareholders the purchase,
sale, exchange, taking on leasing and other transactions of property directly or by subsidiaries
of the stock company within one fiscal year;
i) supervising the process of information publishing and communication with shareholders and
enabling more significant participation of shareholders at the Assembly, ensuring equal
 treatment to shareholders, prevention of granting of priorities to shareholders with larger
influence and control over the stock company to other shareholders.

Article 39

The Chairman and the member of the Supervisory board shall be loyal to the stock company in the
following:
a) submitting reports to other members of the Supervisory Board on their transactions which
represent the best interest of the stock company and the shareholders;
b) reporting on membership in the Supervisory Board, the Auditor’s Board or the management
of another stock company;
c) submitting a report on any form of competition or conflict of interest in the stock company in
cases provided by the law, these regulations and the statute of the stock company;
d) submitting reports with possible influence on the decisions of stock company bodies,
activities, operations, interests of the stock company and its shareholders contrary to
reasonable judgment on the best interest of the stock company or the shareholder;
e) do not impose personal interest or interests of other parties contrary to the reasonable
judgment on the best interest of the stock company and its shareholders;
f) do not accept purchase of shares under conditions not that have not been offered to other
parties,
g) do not propose abolition of the priority right purchase or issuing of shares under different
conditions than to existing shareholders on the basis of inconsistency and partiality and
contrary to the interests of the stock company as a whole or shareholders as a group;
h) do not breach the law, these regulations and other rules and in any other manner act
disloyally to the stock company.

Article 40

The Chairman and the members of the Supervisory Board in large stock companies shall individually
issue a statement at the Assembly on annual fiscal reports, on abiding the laws, Articles 38 and 39 of
these Regulations and other general by-laws of the stock company

Article 41

(1) The Supervisory Board can adopt a Code of ethics for the management of the stock company
which the management needs to abide by.
(2) The Code of ethics pursuant to paragraph 1 of this Article shall define the standards of
professional and skilled management operations, the duties, the conflicts of interest,
confidential business matters, privileged information and other issues of significance for legal
and transparent operation of the stock company.
VI. MANAGEMENT BOARD

Article 42

(1) The management of a stock company is appointed, dismissed and operates in accordance with
the law, these regulations, the statute of the stock company and other by-laws and signed
agreements.
(2) The management is comprised of a director or a director and one or more executive directors,
to be defined by the statute of the stock company.
(3) The management shall operate in the best interests of the stock company and its shareholders.
(4) The management is obliged to submit timely, reliable and detailed information to the
Supervisory Board, notably information related to events that can significantly influence the
success of stock company’s operations.
(5) The contracts of the management shall clearly state the amount and forms of wages for the
management board members.

Article 43

(1) The work scope of the stock company, provided it is comprised of one director and one or
more executive directors, shall be defined by a by-law.
(2) In circumstances pursuant to paragraph 1 of this Article, the by-law regulates the issues
relating to the operations, the decision-making process, minutes taking and other significant
issues in the scope of work of the management.
(3) The stock company management board shall be obliged to hold a session when requested by
the Supervisory Board in which case the Chairman of the Supervisory Board attends the
session.

Article 44

The duties of the management board are defined by Law and stand in accordance with the provisions
of these Regulations related to the duties of the Supervisory Board, the provisions of the statute of
the stock company and the agreement on engagement of a management board member.

Article 45

The management board shall submit separately to the Supervisory Board the annual report on the
operations of the stock company and the statement on abiding the law, these regulations and other
rules, the statute, the general by-laws and the Code of ethics, if adopted pursuant to Article 41 of
these regulations.

Article 46

The Secretary of the stock company shall be regarded as an entity appointed and tasked to perform
operations pursuant to Articles 281 and 282 of the FBiH Law on Public Corporations, the statute and
other by-laws of the stock company.
VII. BOARD OF AUDITORS AND EXTERNAL AUDITOR

Article 47

(1) The Board of Auditors is comprised of a Chairman and at least two members. The
composition, the number of members and operation of the Board is defined by the statute of
the stock company.
(2) The Chairman and the members of Board of Auditors are appointed by the shareholders
Assembly acting upon the proposal of the Supervisory Board or the shareholders or a group
of shareholders with at least 5% of voting shares.
(3) The Chairman and the members of the Board of Auditors cannot be entities with personal
interest in the stock company apart from receiving wages on the basis of their function.
(4) The nomination of a candidate for the Board of Auditors shall include the necessary
documentation and information relating to fulfillment of the conditions provided by law,
regulations and the statute of the stock company.

Article 48

In addition to the operations listed in the Articles 285 and 286 of the Law on Public Corporations,
the Board of Auditors shall follow, if regulated by the statute of the stock company, the scope and
the results of the external auditing and shall channel and indicate the risks that might influence the
success of the stock company’s operations, shall propose measures aimed at reducing financial and
other forms of risks and conduct other activities in accordance with the law and statute of the stock
company.

Article 49

The duties of the Chairman and the members of the Board of Directors and the conditions for their
dismissals are defined by Law and stand in accordance with the provisions of these Regulations
related to the duties of the Supervisory Board, the provisions of the statute of the stock company and
the agreement on engagement of a Board of Auditors.

Article 50

The Chairman and the members of the Board of Directors are entitled to receive compensations for
their work in accordance with the Law and Statute of the stock company.

VIII. RIGHTS OF EXPONENTS OF MATERIAL INTEREST

Article 51

(1) The stock company will intend to provide conditions for enhancing the exponents of material
interests to invest in the stock company (technology…etc).
(2) The stock company shall take the necessary measures to protect the rights of the exponents of
material interests in the stock company.
 Article 52

The exponents of material interests shall be entitled to present their stances and objections in cases of
illegal operations by the authorized entities within the stock company and their rights thus cannot be
disputed.

IX. RISKS, RISK MANAGEMENT AND INTERNAL AUDITING

Article 53

The stock company can use its general by-laws to regulate the definition of risks and risk
management.

Article 54

In circumstances pursuant to Article 53, the stock company shall engage the following principles:
a) Setting of objectives and management of risks that endanger the achievement of the set
objectives.
b) The instruments used to manage the risks are the following: internal auditing, transfer of risks
onto a third entity, risk sharing and withdrawal from risky operations.
c) Internal auditing can be organized as a job post, a process included in several job posts or a
separate organizational segment of the stock company.
d) An efficient internal auditing provides that the stock company has defined its operation
objectives, identified and assessed the risks that might influence the achievement of the set
objectives, established and implemented in practice the internal auditing that will manage the
risks, supervise and conduct auditing of the systems of control.
e) The management of the stock company shall provide annual assessment of the risks for the
stock companies whose shares are being trade on the stock exchange or other organized
public exchange, notably if this assessment is required by the by-laws of these markets.
f) The risk assessment shall include: the changes in the nature and scope of significant risks, the
capability of the stock company to react adequately to the changes, the quality of a regular
process of reviewing internal auditing and cases of omissions made by the internal auditing.
g) The management of a stock company shall inform on the established system of internal
auditing and provide an assessment mark for their activities from which the shareholders are
to obtain information on the management of the stock company.
h) The assessment mark shall include the following: is necessary attention paid to the internal
auditing, are the risks clearly defined, is there a permanent process for following,
establishing, assessing and managing of risks and the scale of probability for the occurrence
of the risks and their effects on the stock company.
X. DIVIDENDS

Article 55

The stock company can pay out dividends on their shares on the basis of an annual report or in a
different period in accordance with he law and statute of the stock company.

Article 56

After a decision on the paying out of dividends is made, the shareholder that is entitled to the
dividends becomes a creditor of the stock company in the amount of the entitled dividends.

Article 57

The dividends can be paid out in the form of money or shares of the stock company.

Article 58

The decision on the payment of dividends shall include: the amount of dividends, the date of creating
the list of shareholders for the payment of dividends, the date of payment and the provision on the
provision on the manner and timeframe for publishing an announcement on the payment of the
dividend.

XI. OTHER RIGHTS AND DUTIES OF SHAREHOLDERS AND OTHER ENTITIES

Article 59

The shareholders achieve their rights and perform their duties in line with the law, these regulations
and the statute of the stock company.

Article 60

The stock company cannot limit the rights of the shareholders in the turnover of shares with the
exception of cases provided by the law and other regulations.

Article 61

(1) The statute and other general by-laws, apart from the relevant law, these regulations and other
rules, can provide additional notices on all significant information related to the work and
operation of the stock company including the ownership structure of the stock company,
provided that this information equally made available to all the shareholders and interested
parties.
(2) The stock company shall make complete, timely and accurate announcements of the
information pursuant to the law and other regulations, the statute and other general by-laws
aimed at creating transparency of the market and enabling potential investors and
 shareholders to assess the stock company and adapt promptly and continuously their
assessments on the shares of the stock company.

Article 62

The management of a stock company shall inform without delay the Supervisory Board of each
inaccurate, tardy and incomplete announcement and inability to access information by the
shareholder or interested party.

XII. MONITORING

Article 63

The Commission conducts monitoring over the application of standards for the governance of the
stock company pursuant to the law and these regulations, in the extent of their binding nature.

Article 64

In monitoring operations, the Commission acts and undertakes measures in accordance with the law
and Regulations on the Manner of Monitoring the Securities Market (FBiH Official Gazette no.
23/05) and other regulations.

Article 65

The Supervisory Board of a large stock company shall provide an assessment on abidance of these
regulations in the annual report on the operations of the stock company.

XIII. PROVISONAL AND FINAL PROVISIONS

Article 66

The stock companies shall harmonize their statutes with the provisions of these regulations within 12
months from the enforcement date.

Article 67

Once these regulations enter force, the Standards for Joint Stock Company Governance (FBiH
Official Gazette no. 32/01) and Standard of the 3 Shareholders Assembly of the Privatization
Investment Fund (FBiH Official Gazette no. 17/02) will cease to be valid.

Article 68

These regulations enter force eight days after being published in the FBiH Official Gazette.
ADDENDUM

Report containing information from the shareholders Assembly

1. Cover page of the report
Information on the Assembly: date, time, location and agenda of the Assembly.
Quorum: information on the quorum for the convened Assembly including information on the
necessary quorum for the Assembly in cases of a rescheduling of the session after an unsuccessful
convention.
Voter requests: indication of agenda items that require a necessary-qualified voting majority.
2. Annual information
The annual report including the analysis of operations and plans of the stock company, the financial
reports for the fiscal year prepared in accordance with accounting standards applied in FBiH and the
report of the external auditor. The financial reports include the balance sheets, favorable balance of
trade, report on cash flow and changes in capital, notes on each of the changes and a detail overview
of all the transactions of related parties subjected to the shareholders approval or the approval of the
management or the stock company’s Supervisory Board, information on entities representing the
stock company and attorneys and other information required by the law and other regulations.
3. Information on decisions of the Assembly
Information on the transactions of the related parties in the context of accounting standards applied
in FBiH and all other relevant information that enable the shareholders to make decisions on the
basis of complete announcement, including information and announcements pursuant to the law,
these regulations and the statute of the stock company, with the following minimum:
Information on each candidate for the appointment:
a) Personal information
State the name, surname and age of each candidate. Indicate each post and function that the
candidate performed in the stock company.
b) Experience
Short description of business and any other relevant experience for each of the candidates, including
their main profession and jobs. Fulfillment of conditions of independency if this condition is
required.
c) Board membership
Indicate for each candidate if they served any posts in other Boards.
d) Legal proceedings
For every candidate indicate each of the following proceedings:
Every order, verdict or decision of the court or any other legal institution in or outside BiH by which
the candidate was sentenced for a crime or a business offense incongruous to the function in the
Board five years from the date the court sentence went into effect or was given a court ban for
performing duties in the board.
e) Transactions of related parties
Describe the nature and the scope of each transaction of the candidate.
f) Evidence of participation
If the candidate was a member of the stock company’s Supervisory Board, indicate the total number
of sessions convened in the last four years of his mandate (or during the whole period of his mandate
if any shorter) and the number of sessions that the candidate attended.
g) Statement of conduct
If the candidate was previously a member of a Board, briefly indicate the contents of a statement on
conscientious and loyal conduct towards the Board and abidance by the laws and regulations.
h) Share ownership
Indicate the number of shares in the stock company in the ownership of the candidate or any other
member of his household and on possibilities of conflict of interest.
If the appointment of Board members is on the agenda, include the description of the shareholders
rights to cumulate their votes.
4. Dismissal of Board members
If the shareholders are requested to vote on a dismissal of a Board member, indicate the following:
a) reasons for the dismissal; and
b) the Supervisory Board session on which the dismissal was proposed including a description of the
voting on the session by indicating the number of votes in favor and the number of votes against the
proposed dismissal.
5. Compensation
In case the compensation was approved, indicate all the types and amounts of compensations that
they are entitled to receive. If the candidate receives compensation for his membership in the Board
outside the stock company, please indicate the type and amount of this compensation.
6. Changes in basic capital
When the agenda provides decision-making on the increase or decrease of the basic capital, describe
the reasons, the effects on the capital structure of the stock company and on the rights of the owners
of securities with a remark on the right of priority purchase.
7. Distribution of profit and payment of dividends
If the agenda foresees the making of a decision on the distribution of profit and the payment of
dividends, indicate the manner of distribution and the amount of dividend. Also indicate the manner
and time of payment of the dividend.
8. Loss cover
If the agenda foresees the making of a decision on the cover of loss, indicate the reasons and the
proposed source of cover, possible alternatives, the effects on the balance sheets of the stock
company, their harmonization with the law and ability of payments of dividends in the future.
9. Merging and incorporation with other stock companies
When the Assembly makes decisions on merging or incorporation with other stock companies, the
following information should be provided:
1. the reorganization plan and information regulated by law
2. financial reports of the participants in the merging/incorporation process, regulated by law
3. all other information required by the law to be submitted to the shareholders.
10. The amendments of status, distribution or termination of the stock company
When the Assembly makes decisions on the amendments to its status, distribution or termination of
the stock company, the following information should be included:
1. a summary of each document related to the amendments of status, distribution and termination of
the stock company,
2. the reorganization plan and information regulated by law
3. reasons for the change of status,
4. explanation of any significant differences in the rights of shareholders that results from the status
change.
11. Purchase, sale, exchange, rent or other property transaction
When the Assembly make a decision on the purchase, sale, exchange, rent or other property
transaction directly or through stock company subsidiaries, it is necessary to:
1. describe the property subjected to transactions and indicate the value of the property undergoing
transactions,
2. describe how the property (or revenues) will be used in the operations of the stock company,
3. indicate reasons of transaction.
12. Appointment of external auditor
In case of decision- making on the external auditor, the following information is required:
1. company and its location,
2. statement of independence from the stock company by the external auditor,
3. description of all other services apart from auditing that the external auditor provided in the last
five years and the amount of compensation received.
If the stock company is changing the external auditor, indicate the reasons for the substitution.
13. Amendments to the statute
In case of decision- making on the amendments to the statute of the stock company, the following
information should be included:
1. text of the amended statute and the summery of its interpretation,
2. reasons for the amendments,
3. effects of amendments for the securities owner.
14. Other issues decided by the shareholders
When the Assembly is making a decision on other issues previously not mentioned, indicate the
reasons for any proposed activity and provide information that would enable the shareholder to vote
on the basis of complete information.
The aforementioned is an accurate and complete report on facts on the stock company and the issues
to be discussed and decided upon at the Assembly.
Authorized Custodian or other entity pursuant to Article 19 of the Regulations,
Name, surname and signature: __________________________